The latest GEP Global Supply Chain Volatility Index reveals a significant rise in manufacturing activity across Asia in February, marking the region’s busiest month since October 2022. This surge, driven by increased purchasing in China, Japan, India, South Korea, and Taiwan, contrasts with a decline in North American factory input demand, reflecting a cooling in US manufacturing growth.
The index, which tracks demand conditions, shortages, transportation costs, inventories, and backlogs, showed global purchases of raw materials and critical components rising at the fastest pace in nearly four years. John Piatek, vice president of consulting at GEP, highlighted the impact of geopolitical tensions, stating, “The war with Iran is already creating an oil supply shock that will disrupt global supply chains.”
In Europe, industrial recovery is gaining momentum, particularly in Germany, though supply bottlenecks are emerging. The UK also reported full capacity in its supply chains. Despite these challenges, global reports of manufacturers stockpiling materials remain below typical levels, indicating a preference for lean inventories.
The index’s regional findings show Asia’s index jumping to 0.40, its highest since 2022, whilst North America’s index slipped to -0.26, indicating underutilised supplier capacity. Europe’s index rose to 0.05, and the UK’s increased to 0.01, suggesting robust activity.
As global demand for raw materials strengthens, companies are urged to assess their exposure to energy and shipping costs. The next release of the GEP Global Supply Chain Volatility Index is scheduled for 10 April 2026.
