What does slippage mean?
Slippage describes a decline, shortfall, or loss of control that occurs when something does not remain at its expected level. In financial and economic writing, it commonly refers to a fall in the value of a currency, asset, price, or business performance, or to the difference between a projected result and the result actually achieved. The term is also used in engineering and transport for slipping, such as the loss of traction when a vehicle’s wheels move less than expected. Its connotations are generally unfavorable: slippage suggests deterioration, deviation, or a gradual failure to hold steady. The word is especially useful because it captures both the movement itself and the gap between expectation and reality, making it valuable in reports about markets, organizations, projects, and machinery.
nounSlippage is a gradual or unexpected decline in value, performance, or quantity, especially a fall that falls short of an expected result. It can also refer more generally to the act or effect of slipping, including the loss of traction between a vehicle and the road.
- A decrease in value, performance, or quantity, especially when it is gradual, unexpected, or falls short of an expected level.
- The amount by which an actual result differs from an expected or projected result, often in finance or performance measurement.
- The act or condition of slipping; in vehicles or machinery, the loss of traction or intended movement.
"The currency experienced significant slippage after the announcement, falling below the exchange rate analysts had projected."
"There was considerable slippage in the fund's performance during the second half of the year."
"Drivers reported slippage on the icy road, making the journey slower and more dangerous."
The plural is used for multiple instances or amounts of slippage, especially in financial, commercial, and performance-related contexts.
"Small slippages in revenue were offset by savings elsewhere in the business."
The word works like a warning light: it names the moment a price, plan, or vehicle fails to hold.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of slippage
Slippage was formed in English from the word slip and the suffix -age, following the pattern of forming a noun for an action, process, or result. Its underlying verb comes from Old English slipan, an inherited Germanic word associated with moving, passing, or slipping. Related English forms include slip, slippery, slipper, and slipstream, which reflect the same basic idea of movement or loss of hold.
How slippage is actually used
The word is neutral in register but common in finance, economics, engineering, and project management. It often carries a negative implication, suggesting deterioration, deviation, or failure to meet expectations. In financial contexts, it usually refers to a decline rather than a general movement in either direction.