The ratio of inventory to shipments at Canadian manufacturing firms. By examining inventories and shipments, the figure is able to gauge to what degree manufacturing firms are satisfying market demand. Inventories include goods not yet sold by firms. Growing inventories are a sign of declining demand as unsold goods pile up in warehouses. Shipments data, on the other hand, is indicative of market demand.

Accordingly, a Manufacturing I/S Ratio greater than 1 suggests an inventory build-up and decreasing demand for manufactured goods, while a ratio less than 1 suggests an inventory reduction and increasing demand for manufactured goods. The I/S Ratio can also be interpreted as an estimate of the time (in months) that it would take to exhaust inventories, holding shipments constant.

The data used to calculate the I/S ratio can be found in the monthly survey of manufacturing released by Statistics Canada each month. The I/S ratio is also a component of the Canadian Leading Indicator Index.

Relevance: Rarely affects markets
Release Schedule: 8:30 AM (EST); monthly, in the middle of each month
Source of Report: Statistics Canada
Web Address: http://www.statcan.ca/start.html
Address of Release: http://www.statcan.ca/english/Release/index.htm
Refer current year > Monthly Survey of Manufacturing
AKA: Inventory to Shipments Ratio