Inventories on an upward trend

Notwithstanding the first decline of shipments in several months, there were mixed signals on the inventory front in September.

Raw material inventories, which are generally built-up in anticipation of future production, rose 0.4% to $27.1 billion the seventh successive increase, Statistics Canada reports.

Meanwhile, inventories of finished products increased 1.1% to $21 billion in September, the highest level since October 2001. Some manufacturers noted concerns about the higher levels of finished-product inventories, as reported in the Business Conditions Survey for October.

The increases in raw materials and finished-product inventories contributed to the 0.5% boost in total inventories in September. Inventories now stand at $62.2 billion, up almost 7.0% since the close of 2003, and extending the upward trend in inventories to nine months.

Primary metals (+2.3%), fabricated metal products (+2.1%) and machinery (+1.7%) manufacturing contributed to the higher level of inventories in September.