The LMI increased 4.7 pts to 62.0 in January, the fastest rate of expansion in the index since June 2022. Both Upstream (63.3) and Downstream (62.7) firms reported similar levels of growth, and smaller firms reported higher expansion (66.0) compared to larger firms (59.6).

• The Inventory Levels index increased to 58.5 (+8.5 pts) and saw a particularly strong increase in the second half of January (63.3). Downstream inventory levels jumped from 33.9 in December to 56.1 in January.

• The Inventory Costs index rose to 70.2 (+8.4 pts) which is the first time the index is above 70.0 since February 2023. The rise in costs was driven by inventory buildup and healthy consumer demand.

• Warehousing:

• Transportation:
• The increase in inventory build up and costs combined with the increase in warehousing activity suggest that there was a sharp upturn in supply chain activity in order to front run potential tariffs on Mexico, Canada, and China.
• Respondents predict continued expansion at 66.1 over the next 12 months: expected continued high inventory costs (69.8), transportation prices expected to grow significantly (81.1), warehousing prices predicted to remain elevated (74.8).