Industrials/Multi-Industry: DEM #674: inventory analysis: more growth, more inflation, no prebuy

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Industrials/Multi-Industry: DEM #674: inventory analysis: more growth, more inflation, no prebuy

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Industrials/Multi-Industry

DEM #674: inventory analysis: more

growth, more inflation, no prebuy

Industry Overview

MORE growth, MORE inflation, NO prebuy 22 May 2026

Investors have concerns that 1Q orders growth was driven by pre-buy. March Equity

Manufacturing’s inventory-to-sales ratio fell slightly sequentially and y/y to 1.51 months Americas

from 1.52, showing no widespread pre-buy. In dollar terms, US manufacturing sales are Industrials/Multi-Industry

up 5.5% y/y and inventory are up 1.3%. The inventory subindex of the PMI remains Andrew Obin

below 50, indicating that companies are not building inventory, which further supports Research Analyst

our view that there is no evidence of pre-buy activity. Pricing for total US manufacturing BofAS+1 646 855 1817

accelerated to 9.1% y/y (+8.5% YTD). Admittedly, this implies volumes were down y/y, andrew.obin@bofa.com

but orders for many of our coverage names were up well above the ~9% y/y average David Ridley-Lane, CFA

Research Analyst

rate of inflation. On balance, this supports our bullish case that volume growth will BofAS

accelerate in 2026. +1 646 855 2907

david.ridleylane@bofa.com

Channel inventories down in March DevinResearchLeonardAnalyst

US Census Bureau data shows that aggregate wholesaler inventories and retailer BofAS

inventories were down y/y in March. Retailers and distributors remain below pre- +1devin.leonard@bofa.com646 855 3698

pandemic levels. Distributors held 1.21 months of inventory in March, below the 2015-

2019 historical average of 1.32 months. In absolute dollars, wholesale inventories are up

2.9% y/y. Looking at publicly traded industrial distributors, days inventory rose q/q in