Wholesale trade demand strengthened in August as new orders and backlogs increased, even as distributors faced a more difficult mix of rising costs, slower supplier deliveries, and growing inventories.

The gains came as the broader U.S. services economy accelerated. The Institute for Supply Management’s Services Purchasing Managers’ Index rose 1.3 percentage points to 55.4% in August from 54.1% in July, marking the 26th consecutive month of expansion. A reading above 50% indicates expansion.

New orders were a major driver. ISM’s New Orders Index climbed 3.7 percentage points to 60.9% from 57.2%, while the Business Activity Index rose 2.6 percentage points to 61.7% from 59.1%.

Wholesale trade was among the industries reporting growth in new orders, providing a direct indication that demand strengthened across the distribution sector during the month.

The improvement stands in contrast to manufacturing, where ISM reported this week that new order growth slowed in August. That divergence suggests demand moving through wholesale distribution remained stronger than conditions reported by some of the manufacturers supplying the sector.

Costs, however, are becoming a bigger concern.

ISM’s Prices Index increased 2.3 percentage points to 72.6% from 70.3% in July, its highest reading since August 2022. Prices paid by services organizations have increased for 111 consecutive months.

Wholesale trade was among 15 industries reporting higher prices in August, while no services industries reported lower prices.

Businesses reported rising prices for products and expenses with direct implications for distributors, including computers and related products, copper and copper products, diesel fuel, freight, gasoline, labor, memory products, petroleum-based products, software licenses, and steel products.

Supply constraints added to those pressures. Graphics processing units, labor, memory components, steel, steel products and wire and cable were among the items reported in short supply.

Supplier deliveries also remained slow. ISM’s Supplier Deliveries Index registered 51.3%, down from 52.8% in July. A reading above 50% indicates suppliers are taking longer to deliver products. Wholesale trade was among 10 industries reporting slower deliveries.

The combination of stronger demand and supply constraints contributed to a sharp increase in order backlogs. The Backlog of Orders Index rose 4.7 percentage points to 55.6% from 50.9%, with wholesale trade among the industries reporting higher backlogs.

Inventory is emerging as another potential pressure point.

The Inventories Index jumped 5.3 percentage points to 56.7% from 51.4%, marking the seventh consecutive month of inventory expansion. Wholesale trade was among the industries reporting increased inventories.

Businesses also became more concerned about how much stock they were carrying. ISM’s Inventory Sentiment Index increased to 54.1% from 52.5%. A reading above 50% indicates respondents consider inventories too high relative to current business requirements. Wholesale trade was among seven industries reporting inventories as too high.

Imports increased as well. The Imports Index rose 4.5 percentage points to 56.3% from 51.8%, with wholesale trade among seven industries reporting higher imports.

The labor picture was more mixed. ISM’s Employment Index remained in contraction territory at 47.8%, up slightly from 47.4% in July. Wholesale trade was an exception, reporting employment growth during the month.

For distributors, the August report points to an economy still generating orders but becoming more difficult to manage operationally. Demand is strengthening and backlogs are growing, but distributors are paying more for products and transportation while contending with supply shortages and slower deliveries.

The inventory numbers add another complication. Distributors are adding stock as orders rise, but some already consider inventories too high. That raises the stakes for purchasing decisions heading into the fall, particularly if demand begins to soften while product and transportation costs remain elevated.

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U.S. wholesale inventories rose 1.3% in July, as distributors increased stocks of both durable and nondurable goods, according to new data from the U.S. Census Bureau.

Merchant wholesale inventories totaled seasonally adjusted $959.1 billion at the end of July, up from a revised $946.4 billion in June and $907 billion in July 2025. That put inventories 5.7% above year-earlier levels.

The monthly increase added about $12.7 billion to wholesalers’ inventories.

Durable goods inventories increased 1.2% to $597.7 billion and were 5.4% higher than a year ago. Nondurable goods inventories rose 1.6% to $361.4 billion and were up 6.4% year over year.

The July increase followed a much smaller gain in June. The Census Bureau revised June’s increase to 0.3% from an earlier estimate of 0.2%.

The report covers merchant wholesalers, including industrial distributors, wholesale merchants, jobbers, exporters, and importers. It excludes manufacturers’ sales offices and branches, as well as wholesale electronic markets and agents and brokers.

The inventory increase came as U.S. goods imports rose sharply in July.

Imports increased $11.4 billion from June to $318.2 billion, while exports fell $6 billion to $199.4 billion. The goods trade deficit widened to $118.8 billion from $101.4 billion in June.

Capital goods imports increased 11.3% from June to $140.1 billion and were 46.9% higher than a year ago. Industrial supplies imports moved in the opposite direction, falling 3.9% for the month and 11.7% from July 2025.

On the export side, capital goods increased 2.9% from June and 13.1% from a year earlier. Industrial supplies exports dropped 11.2% for the month but remained 18.4% higher than in July 2025.

The Census Bureau’s figures are advance estimates adjusted for seasonal and trading-day differences but not for price changes. Wholesale inventory estimates are based on a sample of about 4,200 U.S. wholesale firms.

The inventory increase does not necessarily indicate that distributors are overstocked. The advance report does not include wholesale sales or the inventory-to-sales ratio needed to measure how quickly wholesalers are moving the products they have on hand.

Those figures will provide a clearer indication of whether July’s inventory increase reflects distributors stocking for stronger demand or inventories accumulating faster than sales.

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U.S. wholesale sales remained sharply higher than a year earlier in June despite a month-over-month decline, while inventories continued to grow at a much slower pace, signaling healthy product movement across the distribution sector.

Merchant wholesaler sales totaled $794.1 billion in June, down 3.0% from May but up 14.1% from $696.0 billion in June 2025, according to the U.S. Census Bureau’s Monthly Wholesale Trade Report released Thursday. May sales were revised upward to a 3.5% monthly increase from April.

The report adds to evidence from second-quarter earnings that demand has remained resilient across much of the wholesale distribution industry, even as growth has become more uneven across end markets.

Inventories totaled $944.7 billion at the end of June, up 0.2% from May and 4.2% from $906.4 billion a year earlier. The Census Bureau said the monthly inventory increase was not statistically significant.

For distributors, the more significant trend is the widening gap between sales growth and inventory growth. While sales increased 14.1% from a year ago, inventories grew just 4.2%, indicating wholesalers are moving product considerably faster than they are adding inventory.

That trend pushed the inventories-to-sales ratio to 1.19 in June, down from 1.30 in June 2025. The ratio measures how many months it would take wholesalers to sell existing inventory at the current sales rate. A lower ratio generally indicates inventory is turning more quickly and less capital is tied up in warehouse stock.

The June data align with results reported this week by several publicly traded distributors, including W.W. Grainger, DXP Enterprises, DNOW and Henry Schein, which cited steady customer demand, market share gains and disciplined inventory management despite ongoing uncertainty in manufacturing and construction markets.

The Census report also suggests distributors entered the second half of 2026 with relatively lean inventories, providing flexibility should demand strengthen later in the year. At the same time, companies will need to balance inventory efficiency against the risk of supply disruptions or unexpected increases in customer orders.

The wholesale trade report measures sales and inventories of merchant wholesalers but is not adjusted for inflation. As a result, the year-over-year increase reflects both higher selling prices and changes in the volume of goods sold.

The next Monthly Wholesale Trade Report, covering July 2026 activity, is scheduled for release on Sept. 10.

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U.S. wholesale sales rose sharply in May while inventory growth was flat, signaling distributors continued to move products at a faster pace than they replenished stock.

Seasonally adjusted sales at merchant wholesalers reached $817.4 billion in May, up 3.4% from April and 18.1% from May 2025, according to the U.S. Census Bureau’s Monthly Wholesale Trade Survey released Wednesday.

Wholesale inventories totaled $941.8 billion at the end of May, up 0.1% from April. The Census Bureau noted the monthly increase was not statistically significant because it fell within the survey’s margin of error. Inventories were 4.0% higher than a year earlier.

The inventories-to-sales ratio fell to 1.15 in May from 1.31 a year earlier, indicating distributors turned inventory more quickly than they did in May 2025.

Sales growth was strongest among durable goods wholesalers, where revenue increased 4.2% from April and 18.7% year over year. Nondurable goods sales rose 2.6% from April and 17.4% from a year earlier.

Electrical products distributors led many industrial sectors. Sales at electrical wholesalers climbed 6.2% from April and 37.2% from a year earlier, while inventories increased 22.2% year over year. Professional equipment wholesalers posted a 4.5% monthly sales gain and an 18.8% annual increase. Machinery wholesalers reported sales growth of 4.9% from April and 12.2% from May 2025.

Metal distributors also reported solid results, with sales increasing 4.7% from April and 23.8% year over year. Computer equipment wholesalers posted one of the strongest monthly gains, with sales rising 7.3% from April and 25.7% from a year earlier.

Among nondurable goods distributors, petroleum wholesalers recorded the largest increase, with sales up 8.6% from April and 66.3% year over year. Farm products sales rose 5.9%, while drug wholesalers posted a 1.9% monthly increase. Grocery wholesaler sales edged down 0.4% from April but remained 3.3% above year-earlier levels.

The Census Bureau also revised April wholesale sales higher, reporting a 2.2% increase from March, compared with the previously reported 2.0% gain.

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U.S. service-sector activity expanded for the 24th consecutive month in June, although growth moderated as business activity and new orders cooled from May, according to the Institute for Supply Management’s monthly Services Purchasing Managers Index released Monday.

The Services PMI registered 54.0% in June, down from 54.5% in May but remaining above the 50% threshold that signals expansion. The Business Activity Index fell to 55.4% from 57.7%, while the New Orders Index declined to 55.1% from 57.3%. Despite the slower pace, all four components of the composite index remained in expansion territory.

Employment provided a brighter spot. The services employment index returned to growth for the first time in four months, rising to 51.2% from 47.9% in May, signaling that companies resumed modest hiring.

Wholesale trade was among 14 industries reporting growth during June, joining transportation and warehousing, construction, utilities, retail trade and information services. Four industries contracted during the month: agriculture; educational services; management of companies and support services; and public administration.

Supply chain conditions continued to improve, although delivery times remained extended. The Supplier Deliveries Index registered 54.4%, marking the 19th consecutive month of slower deliveries. Because the index is measured inversely, readings above 50% indicate suppliers are taking longer to fulfill orders, typically reflecting stronger demand.

Price pressures eased but remained elevated. The Prices Index fell to 67.7%, its lowest level since February, as fuel prices moderated following a decline in crude oil prices. However, respondents continued to report rising costs for copper, aluminum, electrical components, heating, ventilation and air conditioning equipment, software licenses and labor.

Supply constraints also persisted for products tied to power infrastructure and data center construction. Survey respondents reported shortages of transformers, switchgear, wire and cable, electronic components and memory products as demand from artificial intelligence and data center projects continued to strain supply.

Respondents across several industries cited tariffs, higher material costs and longer lead times as ongoing challenges. Wholesale trade companies reported continued revenue growth driven primarily by higher prices, while procurement teams described increasing complexity in managing tariffs, import costs and supplier capacity.

Inventories returned to more typical levels after several months of stockpiling. The Inventories Index fell to 51.2% from 62.5% in May, suggesting businesses have largely completed earlier efforts to build inventory ahead of anticipated tariffs and supply disruptions. Meanwhile, the Backlog of Orders Index rose to 54.9%, its second-highest reading in nearly four years, indicating demand continues to outpace fulfillment in parts of the services economy.

ISM said the June Services PMI reading is consistent with annualized real gross domestic product growth of approximately 1.9%, extending the overall U.S. economic expansion to 73 consecutive months.

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U.S. wholesale inventories increased in May while the nation’s trade deficit in goods widened sharply as imports rose and exports declined, according to advance economic indicators released June 26 by the U.S. Census Bureau.

Wholesale inventories increased 0.3% from April to a seasonally adjusted $944.0 billion, following a revised 0.7% increase the previous month. Inventories were 4.3% higher than in May 2025, continuing a steady year-over-year buildup across the wholesale sector.

Retail inventories also expanded, rising 0.6% from April to $832.2 billion. Compared with a year earlier, retail inventories increased 3.4%. The April-to-May gain followed a 0.7% increase recorded in April.

The U.S. trade deficit in goods widened to $105.8 billion in May from $83.0 billion in April as exports declined and imports accelerated.

Goods exports fell $11.8 billion to $207.7 billion, while imports increased $10.9 billion to $313.4 billion, reflecting stronger inbound shipments and softer foreign demand for U.S. products.

For distributors, the report points to continued inventory replenishment as companies position themselves to meet customer demand while navigating shifting trade flows and evolving tariff policies. Higher inventory levels can improve product availability but also increase carrying costs and working capital requirements if demand slows.

The advance report provides an early snapshot of U.S. inventory and trade activity before the Census Bureau releases its full monthly wholesale and retail trade reports.

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The U.S. economy expanded at a faster pace than previously estimated during the first quarter, driven by stronger business investment, exports and government spending, although wholesale trade remained one of the largest drags on economic growth, according to revised data released Thursday by the U.S. Bureau of Economic Analysis.

Real gross domestic product increased at an annual rate of 2.1% during the January-through-March period, up from the agency’s previous estimate of 1.6% and accelerating from 0.5% growth in the fourth quarter of 2025. The revision primarily reflected lower imports than previously estimated, which boosted GDP because imports are subtracted from economic output calculations, partially offset by weaker consumer spending.

The report points to continued strength in business investment and manufacturing while highlighting ongoing challenges for distributors. Among major industries, wholesale trade, retail trade, and finance and insurance posted the largest negative contributions to first-quarter GDP, offsetting gains elsewhere in the economy.

Private goods-producing industries grew 4.5%, while government expanded 7.5% and private services-producing industries increased 0.8%. Information, federal government, professional, scientific and technical services, and durable goods manufacturing were the largest contributors to economic growth.

For distributors, the report reflects a mixed operating environment. Strong capital investment and manufacturing activity continue to support demand for industrial products, technology and equipment, but weakness in wholesale trade suggests many distributors are still contending with cautious customer spending, inventory normalization and uneven order patterns.

Corporate profits increased $74.4 billion during the quarter, an upward revision of $34.0 billion from the previous estimate. Real gross domestic income increased 1.2%, while the average of GDP and gross domestic income rose 1.7%, indicating underlying economic activity remained positive.

Inflation remained elevated. The price index for gross domestic purchases increased 3.6% in the first quarter, while the Personal Consumption Expenditures price index rose 4.6%. Core PCE, which excludes food and energy, increased 4.4%, unchanged from the previous estimate.

Regionally, real GDP increased in 46 states and the District of Columbia. Washington posted the strongest growth at an annualized 4.5%, led by the information sector, while South Dakota recorded the largest decline at 1.6%. Personal income increased 3.4% nationally and rose in 49 states and the District of Columbia.

The Bureau of Economic Analysis will release its advance estimate of second-quarter GDP on July 30, providing the next indication of whether business investment and manufacturing momentum carried into the spring.

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U.S. wholesale inventories increased for the third consecutive month in April as distributors continued rebuilding stock levels while sales grew at an even faster pace, according to the U.S. Census Bureau’s Monthly Wholesale Trade Report released June 9.

Merchant wholesalers’ inventories rose 0.6% in April from March, while sales increased 2.0% after a revised 3.0% gain in March. The combination pushed the inventory-to-sales ratio down to 1.19, the lowest level since December 2013 and a sign that distributors are moving inventory more efficiently despite carrying higher stock levels.

The report suggests wholesalers are becoming increasingly confident in replenishing inventories after several years marked by supply chain disruptions, excess inventory corrections, and economic uncertainty.

Unlike the inventory buildups seen during parts of 2022 and 2023, when slowing demand left many distributors holding excess stock, the latest increase is supported by customer demand. Sales growth has outpaced inventory growth for two consecutive months, indicating distributors are adding inventory without sacrificing productivity.

Durable goods inventories increased 0.8% during April, led by gains in professional and commercial equipment and electrical products. Nondurable inventories rose 0.4%, supported by grocery and related product categories.

The inventory-to-sales ratio is closely watched across wholesale distribution because it measures how quickly inventory is converted into revenue. A lower ratio indicates stronger inventory turnover and more efficient use of working capital.

The April reading of 1.19 marks a significant improvement from levels seen during the industry’s post-pandemic inventory correction and suggests distributors have regained control of inventory management after years of volatility.

The data arrives as several economic indicators point to continued expansion across key distributor end markets. Manufacturing activity remains positive, particularly in sectors tied to data centers, semiconductors, industrial automation, and infrastructure investment. Service-sector activity also continues to expand, with wholesale trade recently identified among the strongest-performing industries in the Institute for Supply Management’s Services PMI report.

For electrical distributors, the inventory gains reflect continued demand tied to utility investment, power infrastructure, and data center construction. Industrial distributors continue to benefit from spending on automation, maintenance, and manufacturing modernization projects, while food and grocery wholesalers have seen stable demand supported by consumer spending.

While inventories are rising, the Census report does not indicate a return to the excess inventory conditions that weighed on distributor profitability in recent years. Instead, April’s data points to a wholesale sector that is cautiously rebuilding inventories while maintaining disciplined stock management.

If demand remains steady through the second half of the year, distributors may be able to continue increasing inventories without creating the overhang that forced many companies into aggressive inventory reductions earlier in the decade.

For now, the latest Census data offers one of the clearest indications that wholesale distribution demand remains resilient. Distributors are carrying more inventory than they were at the start of the year, but customers are buying it even faster.

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Wholesale inventories rose 0.5% in April to $938.6 billion, extending a steady but restrained restocking trend across the distribution sector, according to advance estimates released Friday by the U.S. Census Bureau.

The increase followed a revised 1.5% gain in March, up from the agency’s earlier estimate of 1.3%. Compared with April 2025, wholesale inventories were up 3.4%.

The data indicates distributors are continuing to rebuild inventory levels but remain cautious about committing to larger stock positions despite signs of strengthening demand elsewhere in the economy.

That caution contrasts with a sharp increase in manufacturing orders reported earlier this week. New orders for durable goods surged 7.9% in April to $346 billion, marking a second consecutive monthly increase. Transportation equipment drove much of the gain, with orders rising 21.5% to $130.9 billion. Excluding transportation, durable goods orders increased 1.1%.

The disparity between stronger manufacturing activity and more modest inventory growth suggests distributors are waiting for clearer evidence that demand will remain durable before accelerating purchases.

Trade data released alongside the inventory report pointed to improving economic activity. The advanced goods trade deficit narrowed to $82.4 billion in April from $85.3 billion in March. Exports increased $8.5 billion to $219.7 billion, while imports rose $5.6 billion to $302.1 billion.

The combination of rising exports and a narrowing trade deficit could support additional order activity across manufacturing and distribution channels in the coming months.

Retail inventories also increased in April, climbing 0.7% to $827.3 billion. Retail inventory levels were up 3% from a year earlier and grew faster than wholesale inventories during the month.

That trend could prove significant for distributors. Retail inventory growth often precedes replenishment orders flowing upstream through the supply chain. If consumer demand remains stable, retailers may eventually increase purchases from wholesalers to maintain inventory levels.

For now, inventory growth remains controlled.

The April figures suggest distributors continue to emphasize inventory discipline following the excess stock buildups and subsequent corrections that disrupted many sectors during 2022 and 2023. While inventories are increasing, the pace remains well below the aggressive replenishment cycles seen earlier in the decade.

The stronger durable goods orders data bears watching. If manufacturing demand remains elevated through the summer, distributors could face increasing pressure to accelerate inventory replenishment to support customer demand.

The Census Bureau is scheduled to release its next advance economic indicators report, including May inventory data, on June 26.

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Wholesale distributors continue to adopt artificial intelligence at a slower pace than the broader U.S. economy even as AI usage increased steadily across American businesses during the first half of 2026, according to new data from the U.S. Census Bureau.

The Census Bureau’s Business Trends and Outlook Survey found overall AI adoption among U.S. businesses ranged from 17% to 20% between December 2025 and May 2026. Another 20% to 23% of businesses said they expect to adopt AI within the next six months.

Adoption rates were higher when measured by employment size rather than by number of companies. On an employment-weighted basis, AI adoption reached 32%, indicating larger companies are deploying AI much faster than smaller firms.

The disparity is especially significant for wholesale distribution because the Census Bureau broadened its AI definition in November 2025 to include the use of AI in any business function rather than limiting the measure to producing goods or services. The revised methodology captures a wider range of applications, including customer service, finance, administration, and other back-office operations.

Even under the broader definition, wholesale trade, manufacturing, and retail all reported AI adoption rates below the national average. Wholesale trade includes distributors under the federal North American Industry Classification System.

The survey, which covers about 1.2 million businesses and collects responses every two weeks, tracks how companies are adopting AI across industries, geographic regions, and company sizes. It also examines how businesses are using AI, the types of work it supports and how adoption is affecting operations and labor.

The Census Bureau found most businesses are deploying AI in targeted operational areas rather than across entire enterprises. Researchers also reported limited evidence of broad AI-related job reductions, with most companies using AI to support workers rather than replace them.

The Bureau additionally found companies with broader AI integration often reported stronger business performance and higher investment activity, suggesting advanced AI adoption may increasingly correlate with operational and financial advantages.

AI adoption rates were highest in professional services and financial industries. Separately, work-related generative AI usage among individuals reached about 41% as of November 2025, with adoption accelerating in recent months. A separate November survey of senior executives estimated that 78% of the U.S. labor force works at companies that have adopted AI, while about 54% works at firms using large language models.

Why This Matters to Distributors: Census Bureau data show larger distributors are scaling AI adoption faster while many small and midsize distributors remain in early-stage deployment, widening the competitive gap across the industry.

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