Inventories-to-sales ratio holds steady in August
October 14, 2011
Inventories relative to sales were virutaly unchanged in August, according to the U.S. Census Bureau. The inventories-to-sales ratio throughout the economy was 1.28 on a seasonally adjusted basis. The Census Bureau revised upward its initial estimate of a 1.27 inventories-to-sales ratio in July. If the preliminary August estimate holds, the ratio will hold steady for three straight months at a level not much higher than the all-time low of 1.25 recorded in March. The continuation of lean inventories is good news for trucking companies because it indicates that businesses are maintaining normal replenishment cycles and that any uptick in sales should translate into shipments.
Inventories rose at a slightly higher rate than sales in August but not enough to affect materially the inventories-to-sales ratio. The combined value of distributive trade sales and manufacturers’ shipments adjusteded for seasonal and trading-day differences but not for price changes edged up 0.3% from July to $1.2 trillion. The value of manufacturers’ and trade inventories rose 0.5% to $1.54 trillion.
The inventories-to-sales ratio at manufacturers and retailers in August was 1.34 while the ratio at merchant wholesalers was 1.16. Drilling down to broad categories of retail establishments, the highest seasonally adjusted inventories-to-sales ratio in August was 2.42 at clothing stores — higher than both July 2011 and August 2010. Automobile and parts dealers as well as department stores had ratios of 2.02. The leanest ratio, as usual, was at food and beverage outlets, where the ratio was 0.76, according to Census Bureau figures.
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