INDUSTRY PULSE: Inventory-to-shipment ratio edges down
OTTAWA, Ont. — October’s higher shipments, coupled with a modest increase in inventories, resulted in a slight drop in the inventory-to-shipment ratio to 1.26 from 1.27 in September.
In mid-2004, the inventory-to-shipment ratio had fallen to a low of 1.20 as robust shipments contributed to a strong manufacturing sector at the time. Following a gradual climb earlier this year, the ratio’s trend has since stabilized in recent months.
The inventory-to-shipment ratio is a key measure of the time, in months, that would be required in order to exhaust inventories if shipments were to remain at their current level.
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