Friday, November 28th8.4°C
24302
23919

US businesses restock inventories at solid pace in May in anticipation of sales gains

WASHINGTON - U.S. companies restocked their store shelves and warehouses at a steady pace in May, a sign they expect sales will remain solid in the months ahead.

Business stockpiles rose 0.5 per cent in May, the Commerce Department said Tuesday. That was down slightly from a 0.6 per cent gain in the previous month. April's increase was the highest in six months. Total business sales rose 0.4 per cent, much lower than April's 0.8 per cent gain.

Steady inventory rebuilding can bolster economic growth by increasing demand for manufactured goods and boosting factory production.

Economists generally were encouraged by the report.

"With two months of accumulating stockpiles, we are on track for inventories to boost growth in the second quarter," said Tim Quinlan, an economist at Wells Fargo Securities.

Still, sales need to remain healthy so that companies aren't stuck with unwanted inventories.

For May, inventories at the wholesale level climbed 0.5 per cent, while inventories held by retailers ticked up just 0.2 per cent. Stockpiles held by manufacturers rose 0.8 per cent.

Businesses sharply cut back on restocking in the first three months of the year, a big reason the economy shrank at a 2.9 per cent annual rate. That was the largest contraction since the first quarter of 2009, in the depths of the recession.

But since then companies have stepped up their inventory rebuilding. Greater restocking suggests that companies are confident consumer and business spending will grow, and they want to ensure that they have enough goods to meet the demand.

A report earlier Tuesday showed that retail sales increased at a tepid pace of just 0.2 per cent in June. But there were also encouraging signs in the report: sales in a category that excludes volatile goods such as autos, gas and building materials increased at a healthy 0.6 per cent pace.

More restocking should help the economy resume growing in the April-June quarter. Analysts forecast the economy will expand at a 3 per cent annual rate.

Businesses have stepped up hiring this year, which means more Americans will have paychecks to spend, likely boosting growth. Employers have added an average of 230,000 jobs a month in 2014, up from 194,000 last year.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14922.44-115.97
S&P CDNX755.45-15.61
DJIA17839.0911.34
Nasdaq4796.43+9.113
S&P 5002074.15+1.32
CDN Dollar0.8773-0.0045
Gold1178.50-18.10
Oil69.41-4.28
Lumber327.90-1.60
Natural Gas4.295+0.144

 
Okanagan Companies
Pacific Safety0.15-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.340.00
Cantex0.04-0.005
Anavex Life Sciences0.171-0.004
Metalex Ventures0.04+0.005
Russel Metals30.70-0.80
Copper Mountain Mining2.12-0.04
Colorado Resources0.13+0.01
ReliaBrand Inc0.0134-0.0001
Sunrise Resources Ltd0.045-0.005
Mission Ready Services0.32-0.02

 
24130


24035

FEATURED Property
212412270 A Forest Lane
4 bedrooms 3 baths
$400
more details
Click here to feature your property
Please wait... loading


Don't stop dreaming!

On Wednesday evening I drove through the Bow Valley in Alberta. It is my old home town... the first place Jackie and I moved to in 1988 when we emigrated. We ended up setting up home there and living...


Second marriage issues

It is not unusual that one or both of the parties planning to marry are approaching marriage for the second time. There are pluses and minuses to this new situation. On the plus side, individuals ente...


The last great Canadian tax shelter

A guide to how flow-through fund limited partnerships can mightily aid your tax planning!The end of the year will raise concerns among many professionals, self-employed persons, business owners and ev...

_



24156

24119


Member of BC Press Council


22707