Wholesale inventory to sales trending higher
Wholesale sales:
- Prior month inventories -0.1%
- May 2023 wholesale sales, excluding manufacturers' sales branches and offices, were $650.2 billion.
- Wholesale sales decreased 0.2% from the revised April 2023 level.
- Sales were down 4.0% from the revised May 2022 level.
- The sales change from March 2023 to April 2023 was virtually unchanged, revised from a preliminary estimate of a 0.2% increase.
Inventories:
- Total inventories of merchant wholesalers (excluding manufacturers' sales branches and offices) were $913.7 billion at the end of May 2023, virtually unchanged from the revised April 2023 level.
- Total inventories were up 3.7% from the revised May 2022 level.
- The inventories change from April 2023 to May 2023 was virtually unchanged, revised from a preliminary estimate of a 0.1% decrease.
Inventory/Sales Ratio:
- The May 2023 inventories/sales ratio for merchant wholesalers (excluding manufacturers' sales branches and offices) was 1.41.
- The May 2022 ratio was 1.30, indicating a higher amount of inventory relative to sales in May 2023.
The inventory-to-sales chart above shows that the levels are near the highs of pre-pandemic levels.
At the start of the pandemic, the ratio soared as the economy entered the lock-down phase. Then inventories became a problem due to supply chain issues, which led to a sharp move lower in the ratio, and higher inflation in the process.
Now with the economy slowing (?), and supply chain issues cleared, the ratio is increasing. That should lead to lower prices if it persists over time.
