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US businesses keep stockpiles unchanged in September

November 15, 2017

In this Tuesday, May 16, 2017, photo, a Marshalls tag is attached to merchandise in a store in Methuen, Mass. On Wednesday, Nov. 15, 2017, the Commerce Department reports on business stockpiles in September. (AP Photo/Elise Amendola)

WASHINGTON (AP) — U.S. businesses kept their stockpiles unchanged in September, while their sales rose at a healthy clip, a sign that companies may need to order more goods in the coming months.

Business inventories were flat after an increase of 0.6 percent in August, the Commerce Department said. Sales rose 1.4 percent.

The report suggests companies are prudently managing their supply chains. When sales rise faster than stockpiles, that typically means businesses will soon need to restock. That boosts demand for goods and lifts factory production.

If stockpiles rise faster than sales, that can be a warning sign customers are cutting back and companies are getting stuck with unwanted merchandise.

September inventories were dragged by a 0.9 decrease in the retail sector, where motor vehicle and auto parts dealers’ stockpiles declined 2.4 percent.

Manufacturers’ inventories rose 0.7 percent. Stockpiles at the wholesale level rose 0.3 percent.

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