GEP index shows drop in manufacturing demand amid tariff concerns

Global demand for manufacturing inputs dropped at the fastest pace of 2025 in April, according to the latest GEP Global Supply Chain Volatility Index, signaling a broad-based contraction in purchasing activity led by North America and Asia.

The index, based on a monthly survey of 27,000 businesses, tracks conditions such as demand, shortages, transportation costs, inventories and backlogs. April’s data reflects growing concern among manufacturers about future demand and supply chain instability driven by rising 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 at GEP.

North American manufacturers responded to tariff uncertainty by significantly increasing safety stock, warehousing early Q1 purchases to hedge against future disruption. Meanwhile, Asian supply chains saw a rise in spare capacity, with factory slowdowns reported in China, Taiwan and South Korea.

In Europe, supply chain underutilization fell to a 10-month low, buoyed by industrial growth in Germany and France. However, risks remain if global trade conditions deteriorate. The U.K. continued to show significant weakness, with supplier activity declining at one of the fastest rates in two decades.