United States: Consumer Products Corner – Supply Chain Check-Up: Congestion Eases, But Inventory Management Vital Amid Weak Demand

While overall supply chain congestion may be easing, proactive inventory management remains a primary focus for businesses as consumer demand weakens

As supply chain congestion has gradually eased, inventory levels across consumer products sectors have risen, in some cases rather dramatically. At the same time, inventory turns are down across all sectors save Health & Beauty, the PMI manufacturing index has fallen below 50 (indicating contraction), and the price of oil remains over 20% higher than a year ago. While transportation cost pressures have eased considerably, consumer confidence and levels of discretionary spend will most likely contract as we enter 2023 – meaning sustained high inventory levels far beyond the holidays will fast become a cause for concern.

YoY CP Inventory Turnover & Levels Change: End Q3 2020 - End Q3 2022

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