GEP Global Supply Chain Volatility Index

Data Macro

Source: S&P Global
Source Link: https://www.gep.com/
Frequency: Monthly
Next Release(s): October 10th, 2025 8:00 AM

Latest Updates

The GEP Global Supply Chain Volatility Index slipped to -0.39 in August from -0.35 in July, signaling rising spare capacity globally and reflecting contrasting regional dynamics between U.S. stockpiling and weakening demand in Europe and Asia.
- North America’s index showed supply chains running near full capacity as firms stockpiled raw materials and components, especially in U.S. consumer goods industries like food & beverages and household products.
- Asia’s index dropped to a three-month low, with notable weakness in Japan and Taiwan, while China’s consumer non-cyclicals sector remained flat and India, Indonesia, and South Korea saw increased procurement.
- Europe’s index fell further to -0.90, one of the steepest drops since 2024, as Germany’s basic materials sector softened and UK manufacturing contracted sharply.
- The divergence highlights how tariff fears are driving precautionary stockpiling in North America, while weaker purchasing and destocking weigh on Asia and Europe.
- GEP noted tariffs have become a structural feature of global supply chains, requiring companies to build resilience through supplier diversification and stronger demand sensing capabilities.
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The GEP Global Supply Chain Volatility Index fell to -0.35 in July 2025 from -0.17 in June, signaling increased spare capacity as U.S. manufacturers sharply slowed purchases after front-loading inventories during the tariff pause.
- North America’s index dropped to -0.33 (from -0.06), driven by reduced U.S. factory orders for materials and components.
- Europe’s index declined to -0.30 (from 0.01) as Germany’s rebound lost momentum, stalling the region’s fragile recovery.
- Asia’s index remained below trend due to weakness in Japan, South Korea, and Taiwan, though China saw a rebound in factory buying.
- The U.K.’s index fell to -0.58 (from -0.41), indicating continued elevated spare capacity.
- Inventories eased from June’s stockpiling, while labor and transportation costs remained stable without inflationary pressure.
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The GEP Global Supply Chain Volatility Index rose to -0.17 in June 2025 from -0.46 in May, the highest level this year, indicating global supply chains are operating near full capacity despite ongoing tariff concerns.
- Europe’s index climbed to 0.01 (from -0.30), signaling full capacity use for the first time in over two years, driven by German exports and domestic demand.
- North America’s index rose to -0.06 (from -0.24) as U.S. manufacturers accelerated purchases ahead of the tariff pause ending.
- Asia’s index increased to -0.27 (from -0.40), with stronger activity in India, Japan, and South Korea, though Southeast Asia remains underutilized.
- The U.K.’s index improved to -0.41 (from -0.97), the highest in 7 months but still indicates spare capacity.
- Despite a surge in procurement and stockpiling, global shortages, labor constraints, and transportation costs remain stable and historically typical.
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The GEP Global Supply Chain Volatility Index fell to -0.46 in May 2025 from -0.39 in April, indicating a further rise in spare capacity globally amid weak demand and trade tensions.
- Asia’s index dropped to -0.40 (from -0.32), the lowest since Dec 2023, driven by sharp pullbacks in Chinese factory procurement.
- North America’s index improved to -0.24 (from -0.34) as U.S. manufacturers increased purchases to front-load inventories ahead of tariffs.
- Europe’s index was little changed at -0.30, with modest recovery aided by fiscal stimulus, especially in Germany.
- The U.K. index rose to -0.97 (from -1.12) but remains indicative of deep underutilization in supply chains.
- Global inventories diverged: safety stockpiling rose in North America but remained historically low in Europe, while global material shortages remained below average, signaling adequate supply.
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The GEP Global Supply Chain Volatility Index increased to -0.39 in April from -0.51 in March as declines in demand and stockpiling activity signaled underutilized capacity, but to a slightly lesser extent than the month before.
- North America’s index declined as manufacturers slashed purchases and ramped up inventory stockpiles in response to tariff risks.
- Asia saw the largest increase in spare capacity since late 2023, led by factory slowdowns in China, Taiwan, and South Korea.
- Purchasing activity in Asia hit its weakest level since December 2023 amid falling export demand.
- Europe showed signs of stabilization, with spare capacity at its lowest in ten months due to growth in Germany and France.
- The U.K. recorded one of its steepest declines in supplier activity in the past two decades.
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The GEP Global Supply Chain Volatility Index fell to -0.51 in March, its lowest level since May 2020, indicating the highest level of spare capacity in global supply chains in nearly five years.
- North America’s index dropped sharply to -0.63 (from -0.18), as manufacturers in the U.S., Canada, and Mexico cut purchases amid tariff pressures.
- U.K. supply chain slack widened significantly, with the index falling to -1.23, the lowest since 2020, driven by aggressive destocking.
- Asia’s index edged down to -0.12 from 0.00, as regional supply chains continued to run near full capacity, led by China and India.
- Global stockpiling activity hit a 9-year low, reflecting caution among procurement leaders and reduced confidence in demand.
- Material shortages and labor constraints remained limited, while transportation costs declined and stayed near historical averages.
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The GEP Global Supply Chain Volatility Index fell from -0.21 in January to -0.45 in February, the lowest level since July 2023, indicating that capacity became increasing underutilized across the globe.
- Much of the increase came from increased stockpiling of goods ahead of an anticipated rise in costs from US tariffs.
- In stark contrast, Mexican and Canadian manufacturers harshly reduced their purchases in response to a rapid reduction in exports as U.S. companies refrained from placing orders due to the threat of tariffs and trade policy uncertainty.
- Asia supply chains continue to be at full capacity in February, as was the case at the start of the year, making them the most active globally. Factories in parts of the region such as China, Taiwan and India reported strong export growth.
- Europe and the UK removed an increase in slack in supply conditions.
- In North America, the front running of tariffs caused US supply chains to be busier, but that was offset by lower activity in Canada and Mexico.
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The GEP Global Supply Chain Volatility Index fell from -0.15 in December to -0.21 in January, indicating that supply chains eased slightly to start the year.
- The world’s supply chains are operating at full capacity, with the notable exception of Europe, which remains in a protracted industrial recession.
- Despite the possibility of tariffs and significant uncertainty surrounding their implementation, global manufacturers are not stockpiling inventories.
- Demand for raw materials is slowly recovering, but most of that recovery is in Asia and North America.
- Reports of shortages for key commodities were at their lowest in five years suggesting manufacturers are well stocked.
- Asian and North American industrial markets were tighter than those in Europe and the UK. Suppliers in Asia are “generally operating at full capacity.”
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The GEP Global Supply Chain Volatility Index increased to -0.20 in November, up from -0.39 in October. This indicates that supply chains were the tightest since June. North American manufacturers reported an increase in stockpiling as firms anticipate an increase in import costs likely from expectations that tariffs would be implemented by the new US administration. Asian supply chains became tighter as Chinese activity improved as a result of government stimulus. Europe, on the other hand, saw looser supply conditions as the manufacturing downturn continued, especially in Germany.

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The GEP Global Supply Chain Volatility Index increased to a six-month high of -0.15 in December, up from -0.20 in November. Supply chain activity increased as manufacturers built inventories likely in response to an incoming Trump administration that may implement tariffs. Weak demand continues to be the main reason for loose supply conditions.

Supply conditions in North America and the UK were observed as more slack with the latter region seeing an 8-month low. In Asia and Europe, supply conditions tightened but the latter continued to see weak industrial demand.

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