Tariffs Bite: North American and Asian Manufacturers Retrench in April, With Global Material Purchases Down at Accelerated Pace: GEP Global Supply Chain Volatility Index

• The steep fall in global manufacturers’ purchases signals a likely production slowdown in the near future
• North America factories respond to tariffs by buying fewer inputs and aggressively stockpiling
• Purchasing activity by Asian manufacturers was at its weakest since Dec. 2023 as demand slumps across the region’s key exporting hubs
• Bright spot: Europe’s industrial recession is finally coming to an end as spare capacity shrinks further

Clark, N.J., May 13, 2025 – The GEP Global Supply Chain Volatility Index — a leading indicator tracking demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses — indicated an accelerated reduction in global manufacturers’ demand for inputs (raw materials, components and commodities) in April, signaling a broad-based contraction in purchasing activity by region.

April’s drop in buying across global manufacturers was the sharpest of 2025 to date — specifically in North America and to a lesser extent Asia — as manufacturers scale back in anticipation of weakening future demand as a direct result of tariffs.

“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, vice president, consulting, GEP.

REGIONAL SUPPLY CHAIN VOLATILITY: 

NORTH AMERICAN MANUFACTURERS RAISE SAFETY STOCK TO BLUNT TARIFFS’ NEAR-TERM IMPACT

North American manufacturers sharply increased inventory buffers in April, warehousing front-loaded Q1 purchases in response to rising tariff concerns and a renewed focus on supply chain resilience.

SPARE CAPACITY RISES ACROSS ASIA 

Spare capacity across Asian supply chains increased significantly in April as factory slowdowns were evident in many of the region’s major markets, led by China, Taiwan and South Korea.

In Europe, there were further signs that the continent’s industrial downturn was cooling. Supply chain capacity went underutilized to the smallest degree in 10 months, reflecting growth in Germany and France, though risks remain if global trade conditions worsen.

The U.K. once again recorded significant manufacturing weakness, with supplier activity down at a rate that has rarely been surpassed in 20 years of data availability.

Interpreting the data:

• Index > 0, supply chain capacity is being stretched. The further above 0, the more stretched supply chains are.
• Index < 0, supply chain capacity is being underutilized. The further below 0, the more underutilized supply chains are.

For more information, visit www.gep.com/volatility

Note: Note: Full historical data dating back to January 2005 is available for subscription. Please contact economics@spglobal.com.

The next release of the GEP Global Supply Chain Volatility Index will be 8 a.m. ET, June 11, 2025.

About the GEP Global Supply Chain Volatility Index

The GEP Global Supply Chain Volatility Index is produced by S&P Global and GEP. It is derived from S&P Global’s PMI® surveys, sent to companies in over 40 countries, totaling around 27,000 companies. The headline figure is a weighted sum of six sub-indices derived from PMI data, PMI Comments Trackers and PMI Commodity Price & Supply Indicators compiled by S&P Global.

• 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 U.K. For more information about the methodology, click here.

About GEP

GEP^® delivers AI-powered procurement and supply chain solutions that help global enterprises become more agile and resilient, operate more efficiently and effectively, gain competitive advantage, boost profitability and increase shareholder value. Fresh thinking, innovative products, unrivaled domain expertise, smart, passionate people — this is how GEP SOFTWARE™, GEP STRATEGY™ and GEP MANAGED SERVICES™ together deliver procurement and supply chain solutions of unprecedented scale, power and effectiveness. Our customers are the world’s best companies, including more than 1,000 Fortune 500 and Global 2000 industry leaders who rely on GEP to meet ambitious strategic, financial and operational goals. A leader in multiple Gartner Magic Quadrants, GEP’s cloud-native software and digital business platforms consistently win awards and recognition from industry analysts, research firms and media outlets, including Gartner, Forrester, IDC, ISG, and Spend Matters. GEP is also regularly ranked a top procurement and supply chain consulting and strategy firm, and a leading managed services provider by ALM, Everest Group, NelsonHall, IDC, ISG and HFS, among others. Headquartered in Clark, New Jersey, GEP has offices and operations centers across Europe, Asia, Africa and the Americas. To learn more, visit www.gep.com.

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