Given that the output gap has already closed, a further acceleration of business fixed investment should be regarded not only as an upside risk in the short term but also a factor leading to larger economic swings in the longer term as a result of a subsequent downturn. Looking first at inventory investment, levels of inventories are still relatively low.
The inventory cycle in the manufacturing sector as a whole suggests that the growth in shipments and inventories is more or less in balance. Focusing on individual industries, excess inventories, particularly of general-purpose products, had built up in the iron and steel, and chemical industries, but recently, adjustments in these industries have been coming to an end.