WASHINGTON (Reuters) - U.S. business inventories fell in March amid a decline in imports and further decreases are likely as the novel coronavirus outbreak severely disrupts global supply chains and the flow of goods.
The Commerce Department said on Friday that business inventories slipped 0.2% in March after dropping 0.5% in February. Inventories are a key component of gross domestic product. March’s decline in business stocks was in line with economists’ expectations.
Retail inventories increased 1.0% in March, instead of rising 0.9% as estimated in an advance report published last month. That followed a 0.3% fall in February.
Motor vehicle inventories rose 4.8% rather than surging 5.1% as previously reported. Retail inventories excluding autos, which go into the calculation of GDP, fell 1.0% and not the 1.3% decline as reported last month.
Goods imports decreased in March to their lowest since August 2017, the government reported last week. A drawdown of inventories contributed to gross domestic product declining at a 4.8% annualized rate in the first quarter, the sharpest pace of contraction since the 2007-09 Great Recession.
Wholesale inventories dropped 0.8% in March. Stocks at manufacturers also fell 0.8% in March.
Business sales tumbled 5.2% in March after falling 0.5% in the prior month. At March’s sales pace, it would take 1.45 months for businesses to clear shelves, up from 1.38 months in February.
Reporting by Lucia Mutikani; Editing by Andrea Ricci