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 Calendar

    A calendar used by traders for the purpose of tracking the occurrence ...
  3. Economic Indicator

    A piece of economic data, usually of macroeconomic scale, that ...
  4. Cyclical Industry

    A type of an industry that is sensitive to the business cycle, ...
  5. Economic Cycle

    The natural fluctuation of the economy between periods of expansion ...
  6. Economic Growth

    An increase in the capacity of an economy to produce goods and ...
RELATED FAQS
  1. 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 ...
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. 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.
  5. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  6. Options & Futures

    The Most Important Technical Indicators For Binary Options

    Trading binary options is not for the novice, but if you're ready to delve in, get to know the best technical indicators.
  7. Investing

    What’s The Latest Market Volatility Strategy?

    A minimum volatility (min vol) strategy would be top of mind for investors. In today’s market climate the case for min vol is particularly timely.
  8. Economics

    This Is A Small Country With Huge Potential to Grow

    Trinidad and Tobago's increased revenue and economic success have been primarily generated by its energy sector, but it still might be best to diversify.
  9. Economics

    The World's Top 10 Economies

    A look at the top ten economies in the world.
  10. Economics

    What's Demand Elasticity?

    Demand elasticity is the measure of how demand changes as other factors change. Demand elasticity is often referred to as price elasticity of demand because price is most often the factor used ...

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center