GEP Index Signals Sharp Decline in Global Manufacturing Demand Amid Tariff Fears 

The GEP Global Supply Chain Volatility Index, a key measure tracking demand conditions, shortages, transportation costs, inventories, and backlogs, revealed a steep decline in global manufacturers’ demand for inputs in April, signaling a broad-based contraction across multiple regions. 

“The first blows of the tariff war have landed on global manufacturers. Stockpiling is accelerating at a concerning rate and the first signs of manufacturers anticipating slower demand and supply shortages have emerged.” said John Piatek, VP, consulting GEP. 

In North America, manufacturers boosted inventory buffers in April, stockpiling Q1 purchases to counter tariff concerns and enhance supply chain resilience. In Asia, spare capacity surged as factory slowdowns hit major markets like China, Taiwan, and South Korea. Europe showed signs of a cooling industrial downturn, with supply chain underutilization at its lowest in 10 months, driven by growth in Germany and France, though risks persist if trade conditions deteriorate. The U.K. faced severe manufacturing weakness, with supplier activity dropping at a rate rarely seen in 20 years of data. 

Produced by S&P Global and GEP, the index is derived from S&P Global’s PMI surveys, which aggregate responses from 27,000 companies across 40 countries. A value above 0 signals supply chain capacity is stretched, increasing volatility. A value below 0 indicates underutilization, reducing supply chain volatility.