Results a year ago were lifted by higher sales of replacement parts as dealers built inventories to guard against a possible work stoppage.

Nonetheless many other businesses were building inventories based on confidence that the economy was set to continue to expand.

Last year, flat-out production enabled refiners to keep up with seasonal demand but frustrated efforts to build inventories.

Collective farms are reportedly building inventories in the expectation that grain and meat prices will rise.

"These data should convince skeptics that manufacturers are definitely not building inventories," the report said.

In any case, they say, expectations of further price increases become self-fulfilling, as corporate customers see prices rise and rush to build inventories even higher.

They built inventories on the assumption that consumption would grow because that's what they decided.

It said the sales of Augmentin, an antibiotic, dropped in comparison with the first quarter of 1991, when wholesalers were building inventories.

In order to build inventories up to an appropriate level, firms engage in positive intended inventory investment.

"Over all, the fact they're building inventories means Intel executives are thinking sales will be strong in the second half," Mr. Walia said.