GEP Global Supply Chain Volatility Index, which tracks demand conditions, shortages, transportation costs, inventories and backlogs, showed a rebound in procurement in January.
Procurement activity in many of the globe’s major economies expanded, driving the strongest rise in worldwide demand for commodities, raw materials and components in almost four years. GEP data is based on a monthly survey of 27,000 businesses.
Industrial firms in major economies such as China, Japan, Korea, India, as well as across ASEAN markets underpinned the expansion, highlighting broad-based strength across the region. The regional index rose to 0.12, from -0.20, signalling that the supply chains of Asia’s manufacturers were their busiest since November 2024 in January.
North America, which saw a slowdown through the final quarter of 2025, regained momentum as 2026 began, driven by a pick-up in America’s manufacturing economy. Factory leaders across the continent also showed a greater appetite for inventory building, suggesting a certain degree of confidence in order pipelines. The North American index increased to 0.06, from -0.37, indicating capacity at North America’s suppliers was the most stretched in just over a year-and-a-half.
Europe’s manufacturing sector was the laggard in January, with firms there still showing nervousness to overstock warehouses. A cooling of the downturn in purchasing activity, however, tentatively points to an improving outlook. The European index slid to -0.27, from -0.17, signaling greater spare capacity at Europe’s suppliers than at the end of 2025.
“After several months of treading water, January’s data points to a broad-based recovery across U.S. manufacturing, spanning all sectors,” said John Piatek, vice president, consulting, GEP. “Despite tariffs and trade uncertainty, manufacturers are showing real resilience, supported by a declining cost of capital that’s giving procurement teams greater flexibility to adjust sourcing and inventories.”
Other key findings in the GEP Global Supply Chain Volatility Index include:
- Demand: Global demand for commodities, raw materials and intermediate goods rose by its strongest margin in almost four years during January, as manufacturers in major economies stepped up their purchasing activity at the start of 2026. Asia was a key component of this upturn, with buying growth seen in China, Japan, Korea, India, and across ASEAN. U.S. manufacturers also expanded procurement
- Inventories: Globally, reports of manufacturers intentionally stockpiling because of price or supply worries were muted. This suggests that procurement leaders are not overly concerned about product price inflation or supply. Inventory building is rising in North America, whereas destocking continued in Europe.
- Material shortages: The global items in short supply indicator stayed below its long-run average, as has been the case for nearly two-and-a-half years. This means that global businesses are experiencing shortages less frequently than normal.
- Labor shortages: Labor is not a limiting factor for global production, as global manufacturers’ reports of backlogs increasing due to a lack of staff were below historically typical levels during January.
- Transportation: With global oil prices rising in January, the latest data pointed to an increase in transportation costs at the start of the year.
