Supply Chain Strain at Highest Level Since 2022
As the war in the Middle East fueled inflation fears, shortages and aggressive stockpiling by manufacturers worldwide, global supply chain pressures surged in April, according to the GEP Global Supply Chain Volatility Index.
The GEP Global Supply Chain Volatility Index, based on a monthly survey of 27,000 businesses, jumped to 1.64 in April, from 0.57 in March, its highest reading since October 2022.
"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, consulting, GEP, in a statement. "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. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption."
Businesses globally ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price rises and disruption. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs.
The rush to build inventories pushed global purchasing activity to its strongest level in more than four years and intensified pressure on suppliers. Reports of item shortages rose to their highest level since November 2022.
Asia reported the sharpest deterioration in supply chain conditions during April, driven by surging transportation costs, worsening shortages and rising purchasing activity. Bottlenecks also intensified significantly across Europe and North America.
Global transportation costs climbed to a record high in April, reflecting maritime disruption, soaring fuel prices and logistical challenges linked to the war in the Middle East.