U.S. Business Inventories Down Slightly in March, but Mixed by Distributor
Summary
- Total inventories ease by 0.1% in March.
- Total business sales down 1.2%.
- Retailers’ inventories rise 0.7%.
Total business inventories eased 0.1% (6.4% y/y) in March following a 0.1% increase in February; the February number was revised downward from 0.2%. The Informa Global Markets Survey expected March inventories to be unchanged from February.
Business sales fell in March by 1.2% (-0.6% /y) after a 0.2% decrease in February; that earlier reading was revised from a steady amount reported last month. With the larger decrease in sales than in inventories, the resulting inventory-to-sales ratio rose slightly to 1.39 in March from 1.38 in February; the February ratio was revised from 1.36.
By type of distributor, retail inventories increased 0.7% (+8.2% y/y) in March after a modest 0.2% increase in February, which was revised from 0.7% reported before. Excluding auto dealers, retail inventories rose 0.3% (+3.8% y/y) in March after a decrease of 0.2% in February; the February result is a marked downward revision to the 0.3% increase reported a month ago. Motor vehicle & parts dealers reported a 1.6% increase in inventories for March after a 1.4% increase in February, which was revised from 1.6% reported last month. Inventories at furniture, home furnishings, electronics and appliance dealers were unchanged in March after a 1.0% increase the month before while general merchandise stores saw inventories increase 1.2% after being unchanged in February.
Inventories at merchandise wholesalers were unchanged to down very slightly in March after being very slightly higher during February; The March inventories were up 9.1% y/y. Manufacturers’ inventories in March were down 0.7% (+2.1% y/y) after edging down just 0.1% in February.
Retail sales (not including food services) fell 0.8% in March (+1.1% y/y) following a 0.4% decrease in February. Retailers excluding motor vehicle dealers had a 0.6% decline in March sales (+1.2% y/y) after a 0.2% decrease in February. Total sales in this grouping are equal to the more familiar retail sales total, just excluding motor vehicle and parts dealers.
Wholesale sales declined 2.1% in March (-2.9% y/y) following a 0.4% increase in February. Manufacturers’ shipments were down 0.5% in March (+0.5% y/y) following a 0.6% decline in February.
Given these developments for sales and inventories in each type of distributor, the I/S ratios did vary noticeably. For retailers the I/S ratio was 1.30 in March, up from 1.28 in February. For wholesalers, it was 1.40 for March, up from 1.37 in February and for manufacturers, the March reading was 1.48, down marginally from 1.49 for February.
The manufacturing and trade data are in Haver’s USECON database. The Informa Global Markets forecast is in the MMSAMER database.
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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