Inventories at U.S. wholesalers rose in March at the slowest pace in four months as companies kept their stockpiles in line with demand.
The 0.3 percent gain in stockpiles, which was less than the median forecast in a Bloomberg News survey, followed a 0.9 percent increase in February, the Commerce Department reported today in Washington. Sales climbed 0.5 percent in March after rising 1.1 percent a month earlier.
As the U.S. expansion cools, inventory accumulation may slow with it after stockpiles helped boost fourth-quarter economic growth to the fastest pace in more than a year. Wholesalers had enough goods on hand to last 1.17 months at the current sales pace, the same as in February, the report showed.
“Firms are in a pretty decent shape on their inventories,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. “Firms are just being very cautious. I don’t think there’s a lot of visibility on demand going forward, so firms are not willing to assume strong demand six or nine or twelve months out.
The median estimate in a Bloomberg News survey of 28 economists called for a 0.6 percent gain. Forecasts ranged from increases of 0.4 percent to 0.9 percent. Wholesalers make up about 30 percent of all business stockpiles.
Wholesalers’ inventories of durable goods, or those meant to last several years, increased 1 percent, boosted by lumber, metals, machinery and cars, today’s report showed. Sales of durable goods dropped 0.6 percent, the biggest decrease since April 2011. Car sales dropped 1.7 percent.
Stockpiles of non-durable goods fell 0.6 percent in March, the biggest decrease in six months, after jumping 1.4 percent.
Purchases of unsold non-durable goods rose 1.5 percent, led by petroleum, paper products and farm goods.
The world’s largest economy expanded at a 2.2 percent annual rate in the first after a 3 percent pace in the prior three months, Commerce Department figures show.
Part of the slowdown reflected less support from inventories. Stockpiles were rebuilt at a $69.5 billion annual pace, adding 0.6 percentage point to growth in the first three months of 2012. That compares with a 1.8-point contribution in the prior period.
“A lot of our customers are managing their inventories much tighter now than what they have in the past,” Roy Armes, president and chief executive officer of Cooper Tire & Rubber Co., said during a May 2 earnings call. “A lot of that has to do with the economy, some of it has to do with just managing cash and there’s a lot of it that has to do with the distribution network.”