2012.05.09 17:50:40 UPDATE: US Wholesale Inventory Gains Held Back By Petroleum In March

--Weaker inventory buildup points to downward revision in first-quarter GDP --Leaner stockpiles could be positive for future growth --Petroleum stocks post biggest drop in nearly two years (Updates with economists' views starting in seventh paragraph) By Tom Barkley and Jeffrey Sparshott Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. wholesale inventories rose less than expected in March, held back by the biggest drop in petroleum stocks in nearly two years. Inventories in March rose 0.3% to $480.44 billion, following an unrevised 0.9% jump the previous month, the Commerce Department said Wednesday. A 5.9% drop in petroleum stocks, which retraced the previous month's gain, was the biggest decline since May 2010. Economists surveyed by Dow Jones Newswires had expected a 0.6% gain in overall inventories. Sales registered by wholesalers rose 0.5%, on the back of a downwardly revised 1.1% increase in February. After aggressive stockpiling going into the end of the year, companies have been easing back on their inventory buildup. Inventories accounted for about a quarter of the 2.2% rise in gross domestic product in the first quarter, after contributing about half of economic growth in the final quarter of last year. Several economists trimmed their first-quarter GDP forecasts following the report, with both Barclays and JPMorgan Chase Bank estimating the growth rate is now tracking 1.9% instead of 2.0%. Still, leaner stockpiles could bode well for future growth, if demand remains solid. "This downward revision should be a positive for 2Q growth because less inventory accumulation in 1Q implies that inventories should be less of a headwind for growth in the second quarter," said JPMorgan Chase analyst Daniel Silver. The inventory-to-sales ratio remained at a relatively low 1.17 in March. The ratio measures how many months it would take for companies to empty warehouse shelves. The fact that the ratio has held steady for six straight months suggests "recent stock building has been a planned response to expectations of rising demand, rather than reflecting weaker sales," said Peter Newland, an analyst with Barclays Capital. The trend toward leaner inventories could continue, with the latest Institute for Supply Management manufacturing report indicating a slight contraction in stockpiles, to 48.5 in April from 50.0 the month before. Wholesalers make up about 30% of inventories. In Wednesday's report, non-durable goods inventories, which includes petroleum, fell 0.6% after a 1.4% rise in February. Wholesalers' inventories of durable goods--meant to last three or more years--rose 1.0% in March after a 0.6% increase the month before. -By Tom Barkley and Jeffrey Sparshott, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com (END) Dow Jones Newswires May 09, 2012 11:50 ET (15:50 GMT)