Factory Orders

AAA

DEFINITION of 'Factory Orders '

An economic indicator that reports the dollar level of new factory orders for both durable and non-durable goods. The factory orders report is released monthly by the Census Bureau of the U.S. Department of Commerce one or two weeks following the durable goods orders report.

The factory orders report is split up into four sections:

  • New orders - indicating whether orders are growing or slowing
  • Unfilled orders - indicating a backlog in production
  • Shipments - indicating current sales
  • Inventories - indicating strength of current and future production

It is also known as the "Manufacturers' Shipments, Inventories and Orders".

INVESTOPEDIA EXPLAINS 'Factory Orders '

Because the performance of the economy has a large effect on the performance of the investment markets, it is important for investors to monitor indicators such as the Factory Orders to provide insight into growth trends.

As with other indicators that monitor manufacturing and production, equity markets will be positively affected when the factory orders reports an increase in production. Also the factory orders reports gives more detailed information than the durable goods orders report.

RELATED TERMS
  1. Back Order

    A customer order that has not been fulfilled. A back order generally ...
  2. Economic Growth Rate

    A measure of economic growth from one period to another in percentage ...
  3. Index

    A statistical measure of change in an economy or a securities ...
  4. Durables

    A category of consumer goods, durables are products that do not ...
  5. Cyclical Industry

    A type of an industry that is sensitive to the business cycle, ...
  6. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
Related Articles
  1. Investing Basics

    Economic Indicators That Do-It-Yourself Investors Should Know

    Understanding these investing tools will put the market in your hands.
  2. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  3. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  4. Investing

    What is GDP and why is it so important?

    The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. It represents the total dollar value of all goods and services produced over a ...
  5. Active Trading

    Introduction To Stationary And Non-Stationary Processes

    What to know about stationary and non-stationary processes before you try to model or forecast.
  6. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  7. Economics

    How Demographics Drive The Economy

    Demographics can have a profound effect on the economy. An aging population coupled with a declining birthrate points to a decline in economic growth.
  8. Economics

    The Economic and Social Effects of Corruption

    Corruption results in inefficiencies in the operations of emerging economies, and prevents such economies from reaching the maximum level of development.
  9. Economics

    Understanding the Multiplier Effect

    The multiplier effect is an economic term referring to how an increase in one economic activity can cause an increase throughout many other related economic activities.
  10. Economics

    Is the consumer price index (CPI) the best measure of inflation?

    Discover how the CPI is one of the most used indexes to measure inflation, but due to its limitations, the PPI and GDP deflator are also required.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center