Washington, DC, May 14--Business inventories increased 0.7% to a seasonally adjusted $1.205 trillion in March, after a revised 0.8% advance in February, the Commerce Department reported Friday.
Economists had expected inventories to grow only 0.4%. Some analysts say businesses have been rebuilding stockpiles with caution despite a marked increase in demand for goods. More accumulation is expected; rising materials prices increase the incentive to hold goods on shelves, for instance, and could lead to more rebuilding, analysts say.
Business sales rose 2.9%, after a revised 0.9% increase a month earlier. The inventory-to-sales ratio was 1.30, down from February's 1.33. The inventory-to-sales ratio, an indicator of how well firms are matching supply with demand, measures how long it would take in months for a firm to sell all of its current inventory.
