ASIA'S SUPPLIERS GROWING AT THE FASTEST PACE SINCE EARLY 2023, AS GLOBAL MANUFACTURING GATHERS FURTHER MOMENTUM IN JUNE: GEP GLOBAL SUPPLY CHAIN VOLATILITY INDEX

Core Insights - The GEP Global Supply Chain Volatility Index indicates that global supply chains are experiencing increased activity, with the index at 0.13, slightly down from May's 14-month high of 0.21, suggesting stretched supply chain capacity for the second consecutive month [3][29]. Supply Chain Activity - Asian manufacturers are leading the growth in supply chain activity, with significant increases in input demand driven by major economies such as China, Taiwan, Vietnam, and India [6][29]. - In contrast, North American suppliers are experiencing fluctuating demand, with a slight decrease in factory input demand in June, although they have generally operated at full capacity since the beginning of 2024 [4][10]. Transportation Costs - Global transportation costs have risen to a 20-month high in June, attributed to increased shipping and container rates due to heightened supply chain activity [7][20]. Demand Trends - Global demand for raw materials, commodities, and components is aligning with long-term averages, indicating a potential upswing in the manufacturing business cycle, particularly in Asia [8][29]. Labor Shortages - Reports of labor shortages among global suppliers are more common than historically typical, indicating a need for capacity expansion to meet current and future demand [9][29]. Regional Insights - The North American index fell to -0.11 from 0.09, indicating slight underutilization, while the U.K. index rose to 0.49, signaling the strongest capacity pressures since January 2023 [10]. - The Asian index increased to 0.35, a 16-month high, reflecting busier supply chains amid strengthening factory activity [10][29]. Inventory Management - The inventory cycle has stabilized, with firms neither excessively building up stocks nor aggressively destocking, suggesting a balanced approach to inventory management [27].