Global Supply Chain Volatility Index Global Supply Chain Volatility Index

Global Supply Chain Volatility Index

February 2024

Global: -0.12

Asia: 0.14  +0.54

EU: -0.63  +0.29

NA: -0.33  -0.06

UK: -0.62  +0.53

 

Red Sea Attacks Drive Transportation Costs to 15-Month High and Safety Stockpiling Increases Slightly, but No Signs of Panic So Far: GEP Global Supply Chain Volatility Index

  • Excess global supply chain capacity shrinks to its lowest level in nine months, showing the first signs of recovery in global manufacturing
  • Demand for raw materials, commodities and components, while subdued, also trends higher in January
  • Asian supply chains at their busiest in nearly a year as factory purchasing rebounds in region’s key markets more..

GEP Global Supply Chain Volatility Index

-0.12 

February 2024

Asia: 0.14

EU: -0.63

NA: -0.33

UK: -0.62

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 underutilised. The further below 0, the more underutilised supply chains are.

ASIA: Supply chains were at their busiest in nearly a year, as China, South Korea and India rebounded

EUROPE: Index hits a 5-month high, signaling reduced excess capacity and a positive shift

UK: Excess capacity halves in January, showing significant improvement after 19 subdued months

NORTH AMERICA: Tenth month of shrinking spare capacity, indicating tighter supply chains

The next release of the GEP Global Supply Chain Volatility Index will be 8 a.m. ET, March 13, 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 under-utilised, reducing supply-chain volatility. The further below 0, the greater the extent to which capacity is being under-utilised.

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.