In This Article:
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The steep fall in global manufacturers' purchases signals a likely production slowdown in the near future
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North America factories respond to tariffs by buying less inputs and aggressively stockpiling
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Purchasing activity by Asian manufacturers at its weakest since Dec. 2023 as demand slumps across the region's key exporting hubs
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Bright spot: Europe's industrial recession is finally coming to an end as spare capacity shrinks further
CLARK, N.J., May 13, 2025 /PRNewswire/ -- GEP Global Supply Chain Volatility Index — a leading indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses — indicated an accelerated reduction in global manufacturers' demand for inputs (raw materials, components and commodities) in April, signaling a broad-based contraction in purchasing activity by region.
April's drop in buying across global manufacturers was the sharpest of 2025 to date—specifically in North America and to a lesser extent Asia—as manufacturers scale back in anticipation of weakening future demand as a direct result of tariffs.
"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, vice president, consulting GEP.
REGIONAL SUPPLY CHAIN VOLATILITY:
NORTH AMERICAN MANUFACTURERS RAISE SAFETY STOCK TO BLUNT TARIFFS NEAR-TERM IMPACT
North American manufacturers sharply increased inventory buffers in April, warehousing front-loaded Q1 purchases in response to rising tariff concerns and a renewed focus on supply chain resilience.
SPARE CAPACITY RISES ACROSS ASIA
Spare capacity across Asian supply chains increased significantly in April as factory slowdowns were evident in many of the region's major markets, led by China, Taiwan and South Korea.
In Europe, there were further signs that the continent's industrial downturn was cooling. Supply chain capacity went underutilized to the smallest degree in ten months, reflecting growth in Germany and France, though risks remain if global trade conditions worsen.
The U.K. once again recorded significant manufacturing weakness, with supplier activity down at a rate which has rarely been surpassed in 20 years of data availability.
Interpreting the data:
Index > 0, supply chain capacity is being stretched. The further above 0, the more stretched supply chains are.
Index < 0, supply chain capacity is being underutilized. The further below 0, the more underutilized supply chains are.