Manufacturers Hesitate to Grow Supplies as Sales Increase

Business inventories are edging up as sales head increasingly higher, according to a Commerce Department report for November (link opens as PDF) that was released today.

Seasonally adjusted sales increased 0.8% to $1,318 billion during the month, due primarily to 1% growth for both manufacturers and merchant wholesalers. Comparing November 2012 to November 2013, a 5.5% spike in merchant wholesaler sales provided the main push behind a 4% gain for overall business sales. Manufacturer sales are up 2.6% from November 2012 to November 2013, while retailers added 4.1%.

Month-to-month, inventories expanded a seasonally adjusted 0.4% in November to $1,700 billion, slightly beating analysts' 0.3% expectation. Retail inventories grew 0.8% and merchant wholesalers increased supplies by 0.5%, but manufacturers' inventories stayed steady from October. From November 2012 to November 2013, overall inventories are up 4%.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories increased by relatively comparable amounts from October to November, the inventories/sales ratio remained at 1.29, also the same ratio as November 2012.

Source: Census.gov.

The article Manufacturers Hesitate to Grow Supplies as Sales Increase originally appeared on Fool.com.

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