Inventories in the United States are yet to go down, according to the latest report from Sea-Intelligence, which could lead to a weaker-than-normal peak season.

The Danish research and analysis company said that given that there has been no material pickup in North American imports, the firm looked at data from the US Bureau of Economic Analysis (BEA) to see whether this was being reflected as an inventory reduction in the US.

 [Photo: Sea-Intelligence]

"Looking at Figure 1, for the three categories: manufacturing, retail, and wholesale, the relative size of inventories (in light of development in sales) is on an increasing trend for wholesale and retailers while showing stagnation for manufacturing," the report said.

It added that the underlying sales data indicates a steady -5% decline in wholesale from a peak in June 2022, whereas sales are being held constant for retailers, with no signs of a downward trend.

"Looking at the data, it is clear that the inventory correction in the US is having problems clearing the backlog. But it is not a problem affecting all companies in the same way," said Alan Murphy, CEO, Sea-Intelligence.

"The shift in the balance between the retailers and the wholesalers, as well as the trend in sales in recent months for the two, indicate that the wholesalers potentially are the ones who have a problem," he added.

Murphy went on to note that the data can be seen to support the notion that retailers maintain steady sales, and hence a lack on their part in reducing inventories is not a major problem.

The report said conversely, the wholesalers see declining sales and increasing inventory-to-sales ratios.

Sea Intelligence said if this is combined with a gradual shift back towards retailers, this is an indication that the wholesalers might be sitting on inventory they cannot get rid of.

"For the upcoming peak season, this has the interesting effect that wholesalers might not import peak season goods, whereas the retailers might indeed be fuelling a normal peak season," Murphy said.

"Overall, leading to a weaker-than-normal peak season, but still a peak season though," the Sea-Intelligence chief added.