What are Factory Orders?
Updated: March 28, 2012 at 4:55 AM
Factory Orders Definition. Factory Orders are one of many economic indicators that attempt to measure changes in the production capacity of our economy. This indicator reports total new factory orders for both durable and nondurable goods. The Census Bureau of the U.S. Department of Commerce releases the report monthly, one or two weeks following the durable goods orders report. The report is comprised of four sections: 1) New orders, whether they are growing or receding; 2) Unfilled orders, whether a pipeline or backlog is forming; 3) Shipments, an indicator of current sales volume or potential revenue; and 4) Inventories, whether current and future production are weak or strong. Investors and forex traders are mindful of this fundamental indicator as it can influence market direction and provide insight to future growth trends. The nondurable goods orders consit of food, clothing, light industrial products, and products designed for the maintenance of durable goods. Favorable results tend to affect markets positively since growth in manufacturing and production is a leading indicator of economic health and stability.
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