Stock control - de-stocking was over £5bn in Q1 of 2009

Fascinating evidence from the Office of National Statistics about what happened to firms inventories during the first three months of 2009. Data form the ONS estimates that the value of stocks held fell by £5.4bn during the quarter - a significant reduction. Students might consider why this happened. There will be a variety of causes:

• Deiberate attempts to reduce finished goods stocks by converting them into cash (perhaps by offering lower prices or promotional discounts)
• Closure (temporary or permanent) of production capacity
• Delays in ordering new raw materials and components as a way of conserving cash