A report from the U.S. Census Bureau (http://www.census.gov/) that measures the total value of new purchase orders placed with manufacturers. It’s importance in fundamental analysis comes from the fact that it acts as a leading indicator. As more and more wholesalers and companies place factory orders, manufacturers have to ramp up activity in order to fill those orders.
The report breaks down orders at different stages and gives us other information: new orders, shipments, unfilled orders, and inventories of domestic manufacturers.
Factory Orders and its components come in two parts, Durable Goods Orders and non-Durable Goods Order, with the former usually getting more attention than the second. Durable goods are those that are designed to last more than 3 years and therefore represent bigger purchases – cars & transportation, appliances, capital goods – and are therefore carries more importance.
Initial estimates for Durable Goods Orders are released about a week before the full “Factory Orders” report. The Factory Orders report carries a revision for the preliminary Durable Goods Orders report.
