Manufacturing and trade inventories rose $2.5 billion in September, but sales rose even faster, pulling business' inventory-to-sales ratio down close to its prerecession levels, the Commerce Department reported yesterday.
The figures provided further evidence that the recovery from the recession proceeded strongly in September. Early signals indicate it continued during October and into November but at a slower pace, analysts said.
The business inventory-to-sales ratio was 1.43 last month on a seasonally adjusted basis, down sharply from 1.47 in August and its recession peak of 1.52 in May and June, the department said. The September figure was the lowest since last February and not far above the level of 1.41 for 1978 and 1979.
The ratio, which indicates that the value of inventories was 1.43 times the level of sales, is closely watched by economists as an indicator of whether business is likely to be adding to its stock of goods or reducing them. The lower level last month suggests inventories likely will be rising, a point underscored by recent statistics showing business orders for goods increasing, analysts said.
Most of the improvement came among businesses producing or handling durable goods. Their inventory-to-sales ratio dropped from 2.09 in August to 1.99 in September, while the figure covering nondurable goods was unchanged at 1.00.
Total business sales rose about 3 percent from $308 billion in August to $317.6 billion in September. Inventories rose from $452 billion to $454.5 billion.
Separately, the Commerce Department predicted that the value of new construction in the United States will hit $270.6 billion in 1981, an 18 percent jump over this year's expected level. About half the increase "simply will reflect higher costs," the department said.
The department also released a major revision of its estimates of spending by business for new plants and equipment since World War II.
The revised estimate through 1977 for expenditures by all industries is $198.1 billion compared with $135.8 billion previously. Officials said the higher figure does not indicate that investment for the entire economy, as shown in the accounts covering the gross national product, has been underestimated.