Wholesale inventories rose 0.4 percent in March but are far below the 2.4 percent rise in sales, a mismatch that pulled the inventory-to-sales ratio down 3 tenths to a record low of 1.13. This mismatch is not due to price swings but is fundamental and reflects company reluctance to build stocks as the durables ratio fell 2 tenths to 1.50 vs. a 3 tenth slide for non-durables to 0.83.
But the durables side does show solid evidence of accelerating build with inventories up 0.8 percent on top of a 0.6 percent rise in February. Inventories of metals, computers, electrical goods, lumber and autos all rose. Wholesale sales of durables show wide and more significant gains led by lumber, metals, furniture and machinery. The rise in lumber and furniture sales points to improvement in the housing sector while metals and machinery point to improvement in the industrial sector.