GEP index Signals Sharp ⁢Decline in Global Manufacturing⁤ Demand

Updated May 28, 2025

Global manufacturers’ demand for inputs experienced a ‍steep decline in April, according to the GEP Global Supply Chain Volatility Index. The index, a key measure of demand conditions, shortages, transportation costs, inventories, and backlogs,‍ indicated⁣ a broad-based contraction across multiple regions. This decline highlights the impact of tariff fears on the global manufacturing landscape,impacting supply chain volatility.

The index, produced by S&P⁤ Global and GEP, draws from⁢ S&P Global’s PMI surveys, aggregating responses from 27,000 companies across 40 countries. A value above⁣ 0 signals stretched supply chain capacity,increasing volatility,while a value below 0 indicates ⁤underutilization,reducing supply chain volatility.

in North ⁤America, manufacturers increased inventory buffers in April, stockpiling Q1 purchases to ⁢counter tariff concerns and enhance supply chain ⁢resilience. Meanwhile, Asia saw a surge in spare capacity as factory slowdowns affected⁣ major markets such as China, Taiwan, and South Korea. Europe ⁢showed signs of a cooling⁤ industrial‍ downturn,wiht supply chain underutilization at its lowest in 10 months,driven by growth in ⁢Germany and France. However, risks persist if trade conditions deteriorate.⁤ The U.K. faced notable manufacturing weakness, with supplier activity dropping at a rate rarely seen in 20 years⁣ of data.

⁤ ⁤ “The‍ first blows of the tariff war have landed on global manufacturers.stockpiling is accelerating at a concerning rate and the first signs of ‍manufacturers anticipating slower demand and supply ⁤shortages⁤ have emerged,” said John Piatek, VP, consulting GEP.
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What’s next

The manufacturing sector will likely⁢ continue to navigate the ⁤complexities of trade‍ tensions and supply chain adjustments. Monitoring the GEP Global Supply Chain⁤ Volatility Index will be crucial for understanding the evolving dynamics of global manufacturing demand and potential disruptions.