Inventory to Sales - Lagging or Leading?

[mlredsox2004]

Is the Inventory to Sales Inventory Ratio a lagging or leading indicator. Everything I’ve read indicates that it is a lagging indicator. But a Schweser question said it typically begins in increase during the late stages of an expansion (which makes me think it could be leading).
Thank you!

 

[Moonborne]

What defines an economic indicator as leading or lagging (or coincident) is the timing of the turning point with the business cycle. Inventory to sales ratio does indeed tend to increase during the late stages of an expansion (running up to the peak) but doesn’t turn around at the peak like the business cycle does. Going into the early recession inventory to sales will continue to increase. As producers reduce their output and sell their old inventory, the ratio will begin to increase somewhere in the middle of the recession. The key here is turning point relative to business cycle.