Asia’s supply chains are at their busiest since June 2022 while manufacturing activity in the United States “lost momentum” in September, according to a leading market indicator.

The GEP Global Supply Chain Volatility Index, which tracks demand conditions, shortages, transportation costs, inventories and backlogs internationally, reveals that global supply chains continue to operate below full capacity in September.

The index, produced by GEP and S&P Global, was relatively unchanged between August (-0.39) and September (-0.38).

“Factory activity in China picked up in September, with a notable boost in demand driving the strongest rise in input purchasing across Asia for 10 months,” GEP states in its September index report. “This expansion pushed Asia’s supply chains to near-full utilisation.

“In sharp contrast, North American supply chains lost momentum. Manufacturers cited tariff-related delays and growing concerns about the economic outlook, leading many to hold back purchasing and reduce inventory buffers.”

Europe’s supply chains also remain underused, as manufacturers in Germany, France, and Italy reduced both purchasing and stockpiles, with the region’s supply chain activity falling to its weakest level since March.

John Piatek, vice president, consulting with report authors GEP, says the index represents a “new normal for global companies”.

“Higher prices, tariff pressure, and slower growth are here to stay,” Piatek adds. “For supply chain leaders who’ve been waiting to see how things settle, this is as stable as it’s going to get. 

“It’s time to start executing their revised strategies.”

The GEP Global Supply Chain Volatility Index is based on a monthly survey of 27,000 business in 40 countries with the headline figure being 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.