Much of the inventory reduction in the first quarter reflected a dramatic scaling back of motor vehicle assemblies, which removed excess cars and light trucks from dealer showrooms and lots. By the end of March, the inventory of cars and trucks had fallen to a more satisfactory 61 days supply, though some uptick in light truck inventories was apparent in April.
Inventories of computers, semiconductors, and communication products also backed up, and by contrast, these stocks are only belatedly being brought under control. Inventories of semiconductors and computers have fallen, but less progress appears to have been made with respect to communications equipment. Overall, inventory investment of high-tech producers has probably turned negative, but a period of substantial liquidation still appears ahead for these products.