Global Supply Chain Volatility Index Global Supply Chain Volatility Index

Global Supply Chain Volatility Index

May 2024

Global: 0.21

Asia: +0.19  +0.12

EU: -0.13  +0.42

NA: +0.09  +0.39

UK: +0.15  +0.63

 

MANUFACTURING ACTIVITY WORLDWIDE JUMPED IN MAY, SPURRED BY STRONGER DEMAND ACROSS MAJOR ECONOMIES, INDICATING ROBUST OUTLOOK FOR H2 2024: GEP GLOBAL SUPPLY CHAIN VOLATILITY INDEX

  • Index breaks into positive territory for the first time in 14 months as global manufacturers report stretched capacity
  • Demand for raw materials, commodities and components accelerates, a positive indicator for the rest of 2024
  • Factory purchasing in Asia rising at the fastest rate since December 2021, driven by India, China and South Korea
  • Slack in European markets rapidly shrinking, indicating an advancement of the region’s manufacturing recovery
  • Global reports of order backlogs rising because of staff shortages at their highest since late 2022, signaling future price pressures more..

GEP Global Supply Chain Volatility Index

0.21 

May 2024

Asia: +0.19

EU: -0.13

NA: +0.09

UK: +0.15

Interpreting the data:

When the SCVI > 0, supply chain capacity is being stretched. The further above 0, the more stretched supply chains are.

When the SCVI < 0, supply chain capacity is being underutilized. The further below 0, the more underutilized supply chains are.

ASIA: Factory purchasing rising at the fastest rate since December 2021

EUROPE: Slack in the European market rapidly shrinking

U.K.: Capacity pressures at U.K. suppliers for the first time since January 2023

NORTH AMERICA: Stronger demand from manufacturers slightly stretching capacity

The next release of the GEP Global Supply Chain Volatility Index will be 8 a.m. ET, July 12, 2024.

 

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About the GEP Supply Chain Volatility Index

The GEP Global Supply Chain Volatility Index is produced by S&P Global and GEP. The GEP Global Supply Chain Volatility Index is derived from S&P Global’s PMI™ surveys, sent to companies in over 40 countries, totalling around 27,000 companies. These countries account for 89% of global gross domestic product (GDP) (source: World Bank World Development Indicators).

The headline figure is the GEP Global Supply Chain Volatility Index. This a weighted sum of six sub-indices derived from PMI data, PMI Comments Trackers and PMI Commodity Price & Supply Indicators complied by S&P Global.

The GEP Global Supply Chain Volatility Index is calculated using a weighted sum of the z-scores of the six indices. Weights are determined by analysing the impact each component has on suppliers’ delivery times through regression analysis.

The six variables used are 1) JP Morgan Global Quantity of Purchases Index, 2) All Items Supply Shortages Indicator, 3) Transport Price Pressure Indicator and Manufacturing PMI Comments Tracker data for 4) stockpiling due to supply or price concerns, and backlogs rising due to 5) staff shortages and 6) item shortages.

A value above 0 indicates that supply chain capacity is being stretched and supply-chain volatility is increasing. The further above 0, the greater the extent to which capacity is being stretched.

A value below 0 indicates that supply chain capacity is being underutilized, reducing supply-chain volatility. The further below 0, the greater the extent to which capacity is being underutilized.

A Supply Chain Volatility Index is also published at a regional level for Europe, Asia, North America and the UK. The regional indices measure the performance of supply-chains connected to those parts of the world.

For more information on PMI surveys, PMI Comments Trackers and PMI Commodity Price & Supply Indicators, the GEP Supply Chain Volatility Index methodologies, please contact economics@ihsmarkit.com.