| Factory Orders |
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Released On 5/2/2012 10:00:00 AM For Mar, 2012
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Prior | Prior Revised | Consensus | Consensus Range | Actual |
| Factory Orders - M/M change | 1.3 % | 1.1 % | -1.6 % | -2.5 % to 0.5 % | -1.5 % |
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Highlights
Factory orders swing sharply month-to-month but usually from a big gain one month to a small gain the next. They don't often go deeply into the negative column in any one month. Factory orders fell 1.5 percent in March for the steepest decline in two years. Among main components, the larger of the two, orders for non-durable goods, rose 0.5 percent on strength in food products. The second component, where advance data was released last week, fell 4.0 percent reflecting broad weakness.
Other data include a strong 0.7 percent gain for shipments and only a small rise for inventories which remain lean relative to business activity. A disappointment is only a small 0.1 percent build for inventories.
The drop in durable goods orders during March made for a disappointing second-quarter finish for the nation's manufacturing sector. But easing concern that a new trend may be taking shape was yesterday's ISM report where new order data are less volatile month to month and which shows acceleration for April. Hopefully the ISM report will prove correct and the April factory orders report, released at this time next month, will swing back to the positive side.
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Market Consensus before announcement
Factory orders rebounded 1.3 percent in February to more than reverse a 1.1 percent revised decline in January. Orders for durable goods have been the key strength of the factory sector, rising 2.4 percent in February. Orders for non-durable goods, up 0.4 percent, have also been rising but much less strongly than durable goods. More recently, durables orders declined 4.2 percent in March after a 1.9 percent rebound the previous month.
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Definition
Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month.
Why Investors Care
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![[Chart]](showimage.asp?imageid=22456)
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Even though monthly shipment data fluctuate less than new orders, both series show underlying trends more clearly by looking at year-over-year changes. In 2005 for example,new orders rose more rapidly than shipments due to large gains in aircraft orders. Aircraft orders have a long lead to shipment.
Data Source: Haver Analytics
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