North American factories cut orders in October, says GEP survey
Manufacturers in North America reduced their purchases of raw material and components in October, according to the monthly GEP Global Supply Chain Volatility Index report.
The overall global index score ticked up slightly to -0.33 in October from -0.38 in September. A value above 0 indicates supply chains are being stressed, while a value below 0 means supply chain capacity is being underutilized.
The North American index score fell to -0.45 as manufacturers reported the steepest decline in material purchases since May. The fall in input demand signals a likely cooling of production in the region in the coming months.
The slowdown follows several months of tariff-driven stockpiling earlier in the year.
“North America is seeing the clearest sign yet of a manufacturing pullback,” said Michael DuVall, vice president, consulting, GEP. “Manufacturers are buying less and working down inventories, which points to weaker production through the winter. With spare capacity across global supply, we do not anticipate any price pressure, beyond tariffs, on buyers.”
Asia’s index score dropped to -0.30 from -0.06 in September as Chinese manufacturers reduced purchasing. The decline in Chinese factory purchasing offset continuing strength in India.
Europe’s index score increased to -0.25 from -0.53, as the continent’s manufacturing recovery continued to make slow progress.
Reports of stockpiling due to supply fears remained historically low while the global item shortages tracker was well below its long-term trend level. There was a modest rise in labor-related capacity constraints in October, but it was only marginally above the long-term trend.
Global transportation costs ticked down to just below the historical average.
