GEP: US factories stockpiled in August while manufacturing weakened in Europe and Asia

North American supply chains got busier in August because of tariff-driven stockpiling, while Asian and European manufacturers cut purchases, according to the GEP Global Supply Chain Volatility Index.

The global index score dropped slightly to -0.39 in August from -0.35 in July, signalling more spare capacity in supply chains. A value above 0 indicates supply chains are being stressed, while a value below 0 means supply chain capacity is being underutilized.

There were distinct contrasts in activity between global regions, however.

North America was running at close to full capacity at -0.03, rising from -0.33 in July as companies stockpiled raw materials and components as buffers against tariff-driven shortages and delays. The US consumer goods sector was particularly active in this respect.

In contrast, Asia’s index fell to a three-month low of -0.34, down from -0.09 in July. The decline was driven by weakened purchasing activity in Japan and Taiwan. China was flat, while India saw greater factory procurement activity.

Europe’s factories purchased fewer intermediate goods and destocked, with the regional index score falling to -0.42 in August from -0.30 in July. Germany’s basic materials sector faltered, highlighting the fragile nature of Europe’s industrial recovery in 2025.

"So far tariffs have neither spurred growth nor triggered collapse," said Michael DuVall, GEP’s global head of supply chain strategy. "Tariff uncertainty is no longer a temporary, it’s a structural reality in the supply chain. Companies need to manage it by reinvesting in resilience, diversifying suppliers, and building critical capabilities like demand sensing to make faster, smarter decisions."