GEP supply chain index remains in positive territory for second month

GEP’s Global Supply Chain Volatility Index remained in positive territory for the second consecutive month – driven by strong demand in Asian exporting countries.

The global index score fell slightly to 0.13 in June, down from 0.21 in May. An index value above 0 indicates supply chains are being stressed, while a value below 0 means supply chain capacity is being underutilized.

China, Taiwan, Vietnam, and India have been at the forefront of supply chain activity growth – where heightened factory activity is driving input demand. The Asian index score rose to 0.35 in June from 0.19 in May, reaching a 16-month high.

North America’s suppliers have been oscillating between under- and overutilized capacity, in contrast to Asia’s steady growth since April. The North American index fell to -0.11, down from May’s three-month high of 0.09.

In North America, factory input demand fell slightly as suppliers experienced reduced demand. However, on average, North American vendors have been operating at full capacity since the start of the year.

Europe is still operating with some slack as factory purchasing remains subdued. The region’s index score remained unchanged at -0.13.

“Asian manufacturers are gaining momentum, which, if sustained into the second half of the year, will mean a return of increasing costs and price pressures for global companies,” said Amol Jawale, vice president, consulting, GEP. “Now is the perfect time for a company’s procurement to lock in pricing with key suppliers for 2025.”

Reports of shortages from businesses remained at historically typical levels, while reports of staff shortages were slightly higher than the historical average.

Global transportation costs rose to a 20-month high in June as shipping and container rates grew in response to increasing supply chain activity.