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INDUSTRY PULSE: Inventory-to-shipment ratio holds at record low

OTTAWA, Ont. -- Manufacturers are rebuilding their inventories but there's no concern at this point that inventor...

OTTAWA, Ont. — Manufacturers are rebuilding their inventories but there’s no concern at this point that inventory levels are growing too fast.

Shipment activity is continuing to grow at an equal pace resulting in record low levels for the inventory-to-shipment ratio, data available from Statistics Canada indicates.

In July, the ratio held constant at 1.21.

"This is the lowest level of the ratio since the start of the current series in 1992," notes the government agency.

Canada’s ratio is in line with that of the United States where the ongoing expansion in manufacturing contributed to the ratio holding, for the fourth consecutive month, at 1.23 in July.

The finished-products inventory-to-shipment ratio also held constant at 0.41, maintaining the lowest level for the ratio since mid-2000. The 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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