Chinese factories increased purchasing in September while North America cooled
Chinese factories sharply increased purchasing in September, while North American manufacturers curbed activity amid tariff-related disruptions, according to the monthly GEP Global Supply Chain Volatility Index report.
The overall global index score was flat at -0.38 in September compared to -0.39 in August. A value above 0 indicates supply chains are being stressed, while a value below 0 means supply chain capacity is being underutilized.
The growth in Chinese factory purchasing boosted Asian supply chains to the busiest level since June 2022. The Asian index rose 0.09 points to -0.25 in September as China upped purchases of inputs to facilitate growth in production and sales.
In contrast, input demand was far more constrained in North America and Europe.
North American supply chains lost momentum, dropping to an index score of -0.19 from -0.03 in August. GEP says surveyed manufacturers pointed to tariff-related delays and concerns about economic outlook for constraining purchasing and reducing inventory buffers.
Europe’s supply chains remained underused, dropping slightly to -0.45 from -0.42, as Germany, France, and Italy reduced purchasing and stockpiles. The region’s index score was the lowest since March.
“This is the new normal for global companies — higher prices, tariff pressure, and slower growth are here to stay,” said John Piatek, vice president, consulting, GEP. “For supply chain leaders who’ve been waiting to see how things settle, this is as stable as it’s going to get. It’s time to start executing their revised strategies.”
Reports of supply shortages decreased in September, with there being little challenge in sourcing vendors for commodities, components, or other intermediate products. Report of backlogs due to labor shortages were below the long-term average and the lowest in six months.
Global transportation costs were in line with historically normal levels.
