Post by jeffolie on Oct 10, 2007 9:26:16 GMT -6
Wholesale inventories remain very lean
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- Inventories at U.S. wholesalers remained at the leanest levels ever in relation to sales in August, the Commerce Department reported Wednesday.
Wholesale sales increased 0.4% in August, while inventories rose 0.1%.
The inventory-to-sales ratio remained at a record low 1.11. The typical wholesaler has enough goods on hand to meet about 34 days of sales. Read the full government report.
With lean inventories, wholesalers are well positioned if demand were to drop. But if consumer demand rises more than expected, wholesalers could be caught short and prices could rise.
U.S. businesses generally have very low inventories, one reason why many economists say a recession remains unlikely. In the past, poor supply management has led to large overstocks just as demand falters, requiring heavy cutbacks in production and massive layoffs.
In recent years, however, companies have gotten much better at managing their supply chain, keeping just enough goods on hand to satisfy demand. Swings in demand don't have the same impact on production or employment as in the past because imbalances don't develop.
www.marketwatch.com/news/story/wholesale-inventories-remain-very-lean/story.aspx?guid=%7BEBED5AAE-0A01-404B-BF1C-46D144B65F00%7D
What is not mentioned is what the inventories are in the foreign producer that export to the US. With ever increasing imports, the manufacturers at risk of having excess inventories now are overseas. So, this number may not be representing the true face of wholesale inventories.
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) -- Inventories at U.S. wholesalers remained at the leanest levels ever in relation to sales in August, the Commerce Department reported Wednesday.
Wholesale sales increased 0.4% in August, while inventories rose 0.1%.
The inventory-to-sales ratio remained at a record low 1.11. The typical wholesaler has enough goods on hand to meet about 34 days of sales. Read the full government report.
With lean inventories, wholesalers are well positioned if demand were to drop. But if consumer demand rises more than expected, wholesalers could be caught short and prices could rise.
U.S. businesses generally have very low inventories, one reason why many economists say a recession remains unlikely. In the past, poor supply management has led to large overstocks just as demand falters, requiring heavy cutbacks in production and massive layoffs.
In recent years, however, companies have gotten much better at managing their supply chain, keeping just enough goods on hand to satisfy demand. Swings in demand don't have the same impact on production or employment as in the past because imbalances don't develop.
www.marketwatch.com/news/story/wholesale-inventories-remain-very-lean/story.aspx?guid=%7BEBED5AAE-0A01-404B-BF1C-46D144B65F00%7D
What is not mentioned is what the inventories are in the foreign producer that export to the US. With ever increasing imports, the manufacturers at risk of having excess inventories now are overseas. So, this number may not be representing the true face of wholesale inventories.