Global supply chain pressures hit highest level since 2022: GEP index

Global supply chain pressures climbed in April to their highest level since late 2022 as conflict in the Middle East drove inflation fears, shortages and widespread stockpiling by manufacturers, according to the latest GEP Global Supply Chain Volatility Index.

The index, based on a monthly survey of 27,000 businesses, rose to 1.64 in April from 0.57 in March, marking its highest reading since October 2022.

Manufacturers around the world increased safety stockpiling of goods and raw materials at the fastest pace in three years as companies sought to secure supply ahead of further price increases and potential disruptions.

Asia recorded the sharpest deterioration in supply chain conditions, with transportation costs, shortages and purchasing activity all rising sharply. North America’s index climbed to 1.52 from 0.42, the highest level in 44 months, as manufacturers in Canada and the United States increased purchasing activity to build inventories.

Europe also saw significant pressure, with manufacturers there reporting the most aggressive stockpiling activity globally.

Global transportation costs reached a record high in April, driven by maritime disruptions, higher fuel prices and logistical challenges linked to the Middle East conflict.

“Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” said John Piatek, vice-president of consulting at GEP. “What stands out in April’s data is how broadly the disruption is spreading. Shortages worsened across every major region, signaling this is no longer an isolated transport shock.”

The report also found global purchasing activity reached its strongest level in more than four years, while shortages of critical materials rose to their highest level since late 2022.

Visit here for more information.