TARIFF FEARS DRIVE U.S. STOCKPILING IN AUGUST, WHILE MANUFACTURING WEAKENS IN EUROPE AND ASIA: GEP SUPPLY CHAIN VOLATILITY INDEX
The GEP Global Supply Chain Volatility Index declined to -0.39 in August from -0.35 in July, indicating increasing spare capacity in global supply chains. The report reveals significant regional variations:
North America showed strong activity with near-full capacity utilization, driven by companies stockpiling materials to hedge against tariff-related risks. Meanwhile, Asia's index hit a three-month low, with notable weaknesses in Japan and Taiwan, while Europe continued to decline, particularly in Germany's basic materials sector and UK manufacturing.
The UK experienced a sharp downturn, while China showed flat purchasing volumes. In contrast, South Korea, Indonesia, and particularly India demonstrated increased factory procurement activity. According to GEP's global head of supply chain strategy, companies must adapt to tariff uncertainty as a structural reality by focusing on resilience, supplier diversification, and enhanced demand sensing capabilities.
Il GEP Global Supply Chain Volatility Index è sceso a -0,39 in agosto rispetto a -0,35 di luglio, segnalando una maggiore capacità inutilizzata nelle catene di approvvigionamento globali. Il rapporto evidenzia differenze regionali significative:
Nord America ha registrato un'attività robusta con utilizzo della capacità prossimo al massimo, spinta dalle aziende che accumulano materiali per coprirsi dai rischi legati ai dazi. Al contrario, l'Asia ha toccato un minimo di tre mesi, con debolezze marcate in Giappone e Taiwan, mentre l'Europa ha continuato a mostrare calo, in particolare nel settore dei materiali di base in Germania e nella manifattura del Regno Unito.
Il Regno Unito ha subito una forte flessione, mentre la Cina ha mostrato volumi di acquisto stabili. Invece, Corea del Sud, Indonesia e soprattutto India hanno segnato un aumento degli acquisti industriali. Secondo il responsabile globale della strategia della supply chain di GEP, le aziende devono considerare l'incertezza sui dazi come una realtà strutturale, puntando su resilienza, diversificazione dei fornitori e migliori capacità di previsione della domanda.
El GEP Global Supply Chain Volatility Index cayó a -0,39 en agosto desde -0,35 en julio, lo que indica una mayor capacidad ociosa en las cadenas de suministro globales. El informe revela marcadas diferencias regionales:
Norteamérica mostró actividad sólida con utilización de capacidad cercana al máximo, impulsada por empresas que acumulan materiales para cubrirse frente a riesgos derivados de aranceles. Por su parte, Asia tocó un mínimo de tres meses, con debilidades notables en Japón y Taiwán, mientras que Europa continuó declinando, especialmente en el sector de materiales básicos en Alemania y en la manufactura del Reino Unido.
El Reino Unido experimentó una fuerte caída, mientras que China presentó volúmenes de compra planos. En contraste, Corea del Sur, Indonesia y especialmente India mostraron mayor actividad de adquisición en fábricas. Según el responsable global de estrategia de cadena de suministro de GEP, las empresas deben adaptarse a la incertidumbre arancelaria como una realidad estructural, centrándose en la resiliencia, la diversificación de proveedores y mejores capacidades de detección de la demanda.
GEP 글로벌 공급망 변동성 지수는 7월의 -0.35에서 8월 -0.39로 하락해 전세계 공급망에 여유 용량이 늘고 있음을 나타냈습니다. 보고서는 지역별로 큰 차이를 보여줍니다:
북미는 거의 최대 수준의 가동률을 보이는 강한 활동을 기록했으며, 기업들이 관세 위험을 회피하기 위해 자재를 비축한 것이 주요 요인입니다. 반면에 아시아는 3개월 만에 최저치를 기록했고, 일본과 대만에서 약세가 두드러졌습니다. 유럽은 계속 하락세를 보였으며, 특히 독일의 기초 소재 부문과 영국의 제조업이 악화되었습니다.
영국은 급격한 침체를 겪었고 중국은 구매량이 보합세를 보였습니다. 반대로 한국, 인도네시아, 특히 인도는 공장 구매 활동이 증가했습니다. GEP 글로벌 공급망 전략 책임자는 기업들이 관세 불확실성을 구조적 현실로 받아들이고 회복력 강화, 공급업체 다각화, 수요 감지 능력 향상에 주력해야 한다고 강조했습니다.
Le GEP Global Supply Chain Volatility Index a diminué à -0,39 en août contre -0,35 en juillet, indiquant une capacité excédentaire croissante dans les chaînes d'approvisionnement mondiales. Le rapport met en évidence des variations régionales significatives :
Amérique du Nord a affiché une forte activité avec une utilisation de capacité proche du maximum, portée par des entreprises qui stockent des matériaux pour se prémunir contre les risques liés aux droits de douane. En revanche, l'Asie a atteint un creux sur trois mois, avec des faiblesses notables au Japon et à Taïwan, tandis que l'Europe a poursuivi son recul, notamment dans les matériaux de base en Allemagne et la fabrication au Royaume-Uni.
Le Royaume-Uni a subi un net ralentissement, alors que la Chine a montré des volumes d'achat stables. En revanche, la Corée du Sud, l'Indonésie et surtout l'Inde ont enregistré une hausse des achats industriels. Selon le responsable mondial de la stratégie chaîne d'approvisionnement de GEP, les entreprises doivent considérer l'incertitude tarifaire comme une réalité structurelle en renforçant la résilience, la diversification des fournisseurs et les capacités de détection de la demande.
Der GEP Global Supply Chain Volatility Index sank im August auf -0,39 von -0,35 im Juli und signalisiert damit eine wachsende Reservekapazität in globalen Lieferketten. Der Bericht zeigt deutliche regionale Unterschiede:
Nordamerika verzeichnete starke Aktivitäten mit nahezu vollständiger Kapazitätsauslastung, angetrieben von Unternehmen, die Materialien horten, um sich gegen zollbedingte Risiken abzusichern. Asien fiel auf ein Drei-Monats-Tief, mit spürbarer Schwäche in Japan und Taiwan, während Europa weiter zurückging, besonders im Bereich Grundstoffe in Deutschland und in der britischen Fertigung.
Das Vereinigte Königreich erlebte einen starken Abschwung, China wies hingegen stabile Einkaufsvolumina auf. Dagegen zeigten Südkorea, Indonesien und insbesondere Indien gesteigerte Beschaffungsaktivitäten in den Werken. Laut dem globalen Leiter der Supply-Chain-Strategie bei GEP müssen Unternehmen die Unsicherheit durch Zölle als strukturelle Realität akzeptieren und auf Resilienz, Lieferanten-Diversifizierung und verbesserte Nachfrageerkennung setzen.
- North American supply chains operating at near-full capacity
- Increased factory procurement activity in South Korea, Indonesia, and India
- Companies actively adapting to tariff challenges through strategic stockpiling
- Global Supply Chain Volatility Index declined to -0.39, indicating increasing spare capacity
- Asia's index fell to three-month low with weakness in Japan and Taiwan
- European manufacturing deteriorated, particularly in Germany and UK
- China's purchasing activity remained flat in consumer non-cyclicals sector
Insights
Regional supply chain divergence with US stockpiling due to tariff fears while Asia and Europe show manufacturing weakness.
The latest GEP Supply Chain Volatility Index at -0.39 in August (down from -0.35 in July) reveals a striking regional divergence in global supply chain dynamics. North America stands out as supply chains operate near full capacity, primarily driven by defensive stockpiling across US consumer goods sectors preparing for potential tariff-induced disruptions.
What's particularly noteworthy is how this strategic inventory building contrasts sharply with deteriorating conditions elsewhere. Asia's manufacturing weakness stems primarily from Japan and Taiwan, with China showing flat purchasing volumes despite its economic size. Meanwhile, Europe continues its troubling trend with Germany's basic materials sector struggling and the UK manufacturing showing one of its steepest contractions since 2024.
These divergent patterns reflect a fundamental shift in global trade dynamics. The data suggests tariff uncertainty has evolved from a temporary disruption to a structural reality reshaping supply chain strategies. Companies aren't merely reacting to immediate threats but implementing longer-term resilience measures including supplier diversification and enhanced demand forecasting capabilities.
For investors, this indicates potential margin pressure for companies unable to quickly adapt their supply chains, while those with diversified supplier networks may gain competitive advantages. The regional disparity also suggests different earnings trajectories for companies with concentrated exposure to weakening markets versus those positioned to capitalize on North American stockpiling demand.
The August GEP Supply Chain Volatility Index reveals how tariff fears are creating profound regional disparities in global manufacturing. North American businesses, particularly in the US consumer goods sector, are implementing a classic defensive stockpiling strategy - building inventory buffers against anticipated tariff-driven shortages and price inflation.
This stockpiling behavior represents a textbook example of how trade policy uncertainty creates economic distortions. When companies divert capital to excess inventory rather than productive investments, it typically signals concerns about future trade conditions. The data shows this behavior is concentrated in specific sectors rather than economy-wide, indicating targeted rather than blanket concerns.
Meanwhile, Asia's manufacturing sectors display a more cautious approach, with purchasing activity weakening across Japan and Taiwan while China shows flat growth. Europe's continued deterioration (index at -0.90) represents one of the steepest declines since 2024, with Germany's critical basic materials sector showing particular weakness.
These regional divergences highlight how trade policy expectations create self-reinforcing economic patterns. North American stockpiling could temporarily boost manufacturing metrics while potentially creating inflationary pressure. Conversely, Asia's and Europe's manufacturing restraint might indicate longer-term strategic adjustments to changing trade conditions rather than cyclical responses.
Most telling is the industry expert's assessment that tariff uncertainty has evolved from temporary to structural - suggesting market expectations for persistent trade tensions rather than rapid resolution.
North America's supply chains get busier, with sharp stockpiling of components to guard against tariff-driven shortages and price inflationAsia's manufacturers cut purchases, led byJapan andTaiwan , and to a lesser extentChina Europe weakens further, dragged down byGermany and a sharp downturn in theUK
The global figure concealed stark regional contrasts.
By contrast,
"So far tariffs have neither spurred growth nor triggered collapse," said Michael DuVall, GEP's global head of supply chain strategy. "Tariff uncertainty is no longer a temporary, it's a structural reality in the supply chain. Companies need to manage it by reinvesting in resilience, diversifying suppliers, and building critical capabilities like demand sensing to make faster, smarter decisions."
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.
REGIONAL HIGHTLIGHTS
ASIA : Index fell to a three-month low to indicate rising spare capacity acrossAsia's supply chains as purchasing volumes inChina was flat. In contrast,South Korea ,Indonesia and particularlyIndia saw greater factory procurement activity.NORTH AMERICA : Supply chains were practically running at full capacity as recent orders were delivered and companies added to stock.EUROPE : Index falls again as factories purchased fewer intermediate goods and destocked. The data continue to highlight the fragile nature ofEurope's industrial recovery.U.K. : Index falls sharply to -asU.K. manufacturers cutback on procurement and inventories.
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: 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, Oct. 10, 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
About GEP
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