Global manufacturing demand rebounds in January
Procurement activity rose in many major economies last month, according to GEP’s monthly supply chain volatility index report.
The global index score fell slightly to -0.21 from -0.17 in December. An index value above 0 indicates supply chains are being stressed, while a value below 0 means supply chain capacity is being underutilized. GEP’s index tracks 27,000 business globally.
January saw demand for commodities, raw materials, and components rise the highest level since May 2022.
Factory purchasing in China, Japan, Korea, and India underpinned the growth in demand. Asia’s index score rose to 0.12 from -0.20 in December, with regional manufacturers registering their busiest month since November 2024.
North America, which saw a slowdown through Q4 2025, regained momentum in January on the back of US manufacturing. The region’s index score rose to 0.06 from -0.37, with capacity at North American suppliers at their most stretched in just over a year-and-a-half.
“After several months of treading water, January’s data points to a broad-based recovery across U.S. manufacturing, spanning sectors and geographies,” said John Piatek, vice president, consulting, GEP. “Despite tariffs and trade uncertainty, manufacturers are showing real resilience, supported by a declining cost of capital that’s giving procurement teams greater flexibility to adjust sourcing and inventories.”
Europe’s manufacturing sector was the laggard in January, with firms showing reticence to overstock warehouses. Europe’s index score dropped to -0.27 from -0.17, signaling greater spare capacity than at the end of the year.
Globally, reports of intentional stockpiling due to price or supply worries were muted, with procurement leaders not too concerned about price inflation or supply.
Reports of materials shortages stayed below the long-run average, as they have for the last two-and-a-half years. Reports of backlogs due to lack of staff were also below historically typical levels.
Transportation costs ticked up in January on the back of rising global oil prices.
