IN Brief:
- GEP’s September global index reached 0.87, while Asia rose to 1.49 and North America to 1.13.
- European and UK pressure readings fell despite higher purchasing activity, illustrating differing regional capacity conditions.
- Reported material shortages increased for the first time since May, and transport costs rose on average for the first time since April.
Global manufacturers increased their purchases of raw materials and components in September, but the resulting strain on supply networks differed considerably by region, according to the latest GEP Global Supply Chain Volatility Index. Released on 12 October, the survey-based index put Asian supply chain pressure at 1.49, compared with 1.13 in North America, 0.66 in Europe and 0.59 in the United Kingdom. Its global reading was 0.87, indicating capacity was being stretched overall, rather than operating with substantial spare capacity.
The index is produced by S&P Global and GEP using purchasing managers’ survey evidence across more than 40 countries, covering a source base of approximately 27,000 companies. It tracks demand, shortages, inventory behaviour, transport costs and backlogs. A positive reading indicates pressure on available supply chain capacity; a negative reading suggests underutilisation. The figure is an index reading, not a percentage increase in orders, costs or physical production, and the regional readings should not be interpreted as interchangeable measures of freight volumes.
In Asia, the index advanced from 1.24 in August to 1.49 in September, a three-month high. GEP identified faster purchasing by manufacturers in Taiwan and South Korea among the developments underpinning the regional increase. North America also experienced a rise, from 0.87 to 1.13, with the United States providing much of the reported momentum. The broader global measure was consistent with input demand growing at its fastest rate since May, close to the strongest pace recorded during 2026.
Although the survey identified increased purchasing among German manufacturers, the European supply-pressure measure declined from 1.27 to 0.66. The UK reading fell from 1.10 to 0.59, which GEP linked to less precautionary stockpiling by British manufacturers. Stronger buying in selected industries therefore does not necessarily mean that every supplier or market is operating closer to its capacity limit. The geographical distribution of orders, available production resources and previous inventory accumulation all influence the pressure reported.
The report also recorded a deterioration in material availability. Survey responses indicating shortages rose for the first time since May, with oil and oil-based products particularly affected. Rising demand for components and intermediate inputs can expose shortages that are less visible when order books are weak. Manufacturers may therefore face stronger aggregate demand while still struggling to obtain particular feedstocks on the dates needed for production, even when the headline survey measures are rising.
GEP reported that global transportation costs rose on average for the first time since April 2026. Transport costs are distinct from material shortages, but both can affect the total landed cost of an industrial component. A buyer receiving a stable supplier quotation may still face higher delivery expense, while manufacturers shipping across several borders can encounter different freight and capacity conditions at each stage.
GEP found that inventory accumulation did not rise uniformly across the surveyed markets. Reports of companies adding precautionary safety buffers continued to decline from their June peak, even though the index provider said those holdings remained historically elevated. That combination suggests firms were using inventory as protection against disruption while becoming more selective about further accumulation. It does not establish the level of stock held by an individual manufacturer or indicate that all industries have reduced their coverage equally.
Labour-related constraints were reported to have eased. Fewer businesses cited rising order backlogs caused by staff shortages, leaving material availability and freight costs as more prominent sources of friction in the September findings. Additional factory or warehouse staff can reduce labour-related backlogs, but cannot replace an unavailable chemical feedstock or offset higher freight charges caused by rising fuel costs.
Regional differences in purchasing and supplier capacity mean a global index cannot determine procurement conditions for every industry. Suppliers in Asia may be handling tighter order books while comparable European producers have more capacity available. Changes in supplier allocation, transit times and landed cost might therefore affect a sourcing decision differently depending on the commodity. The index can identify where to ask questions, but it does not replace individual supplier lead times, contractual commitments or a company’s own order and stock records.
GEP’s next scheduled index release is 11 November, providing another observation of whether September’s purchasing momentum was sustained. September’s readings show stronger manufacturing purchasing accompanied by shortages and higher freight costs, while the capacity-pressure measures remain considerably higher in Asia and North America than in Europe. The commercial picture will depend on whether demand continues to outpace the available inputs and transport capacity serving each manufacturing region.
