European companies have witnessed an unusual accumulation of stocks since mid-2018. In March 2019, the Eurozone’s inventories to new orders ratio, based on the Manufacturing PMI, hit a new peak, the highest level since the crisis of 2012 and higher than anywhere else in the world. For large companies in the Eurozone manufacturing sector, the average Days Inventory Outstanding (DIO), a measure of how long it takes on average for a company to turn its inventory into sales, increased by four days to 52 days in 2018, compared to 2017. The highest increases were seen in Spain (+11 days) and Germany (+6 days). For Eurozone SMEs in the sector, DIOs increased by four days to 58 days, with the largest rises registered in Italy (+9 days) and Germany (+6 days).
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