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Inventory-to-shipment ratio remains high

OTTAWA, Ont. -- Following a big jump in April, the inventory-to-shipment ratio remained constant at 1.49 in May.


OTTAWA, Ont. — Following a big jump in April, the inventory-to-shipment ratio remained constant at 1.49 in May.

The number indicates difficulty by manufacturers to clear inventories as a result of weakening demand.
The inventory-to-shipment ratio is at its highest level since December 2001 (1.55), Statistics Canada reports.
Declining shipments and inventories contributed to the high ratio.

The inventory-to-shipment ratio had remained stable around 1.43 in the first quarter.

Despite May’s increase in finished-product inventories, the finished-product inventory-to-shipment ratio was unchanged at 0.47 for the second consecutive month. In May, the ratio remained at the highest level since the economic downturn of 2001. The ratio has been on an upward trend since the autumn of 2002. The ratio is a measure of the time that would be required in order to exhaust finished-product inventories if shipments were to remain at their current level.


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