Why Concerns Around Supply Disruptions Reach Record Highs

The Q2 2025 CIPS Pulse Survey, drawing insights from procurement and supply professionals, highlights an increase in concern over short-term and long-term supply chain disruptions.

These concerns are now at their peak since tracking began, attributed to ongoing instability in the Middle East and the introduction of new US tariff policies.

Industries such as fuel, food and shipping are anticipating substantial supply risks and significant price rises, which are likely to have a chain reaction affecting suppliers and consumers globally.

Record-high concerns

The CIPS survey collected responses from 200 senior supply chain and procurement professionals worldwide, spanning sectors like healthcare, banking, manufacturing and government.

Within the survey, professionals express their concerns on a scale from 1-7, allowing CIPS to observe any shifts in perception.

Conducted in March, the Q1 survey engaged with supply leaders who provide insights into sourcing decisions and cost pressures.

Between the quarterly reports, concerns have intensified due to geopolitical shifts.

Dr John Glen, CIPS Economist, remarks: “This pulse check clearly indicates the impact of escalating tariffs globally and increased geopolitical tension in the Middle East on procurement managers’ perception of supply chain risk.

“The volatility and uncertainty which has permeated global supply chains is providing unprecedented, in recent times, challenges to procurement professionals.”

When asked about concerns over the next three months, the average score was 4.57 out of 7, rising from the Q1 score of 4.36, marking the highest recorded to date.

This worry increases for the 12-month outlook, with an average score of 5.03 out of 7, compared to Q1's 4.91.

Ben Farrell, CEO of CIPS, shares: “Global procurement leaders are operating in uncharted waters. Between geopolitical shocks, tariff upheaval and ongoing price volatility, we’re reaching anxiety levels not seen before.

“It’s no longer a question of ‘if’ disruption happens, it's about preparing for when and where.”

Prices set to rise

Forecasts reveal that input prices will climb, with five spending categories predicting increases exceeding 10%. Previously, only three categories crossed this concern threshold in Q1.

John adds: “The fact that significant price increases are appearing in multiple channels within supply chains will put additional pressure on organisations to increase final prices to consumers.

“This in turn may hamper central banks' ability to reduce interest rates shortly, thus affecting their capability to stimulate sluggish economic growth in Europe and the UK.”

As input prices rise, consumers can expect higher costs.

Increased shipping costs will ripple through all products and industries, leading to higher prices across the board, from furniture to food.

Fuel price hikes threaten to raise heating and transportation costs.

With climbing food prices, grocery inflation is a major risk, suggesting that consumers will face price increases throughout the aisles.

Potentially alarming, higher costs and availability issues could affect medicines and chemicals, risking a healthcare crisis.

Ben cautions: “We are entering a new era of supply chain risk, where political decisions thousands of miles away directly raise prices at the checkout.

“From shipping lanes to silicon chips, no category is safe from disruption. Procurement professionals are the economy’s early warning system and this quarter; the alarms are blaring.”

Confidence concerns

Survey respondents cited geopolitical factors as the cause of supply shortages, with 53% attributing issues to these factors.

The trade conflict between the US and China was identified by 36% as a primary contributor.

Notably, the concern over inflation dropped significantly from 59% in Q1 to 41% in Q2, indicating procurement leaders are grappling with risks extending beyond price hikes.

Despite efforts by procurement leaders to mitigate these risks by expanding their supplier base and increasing insourcing, concerns are overshadowing confidence.

With persistent tariff elevation and unresolved conflicts, global supply chains need to adjust to respond to this persistent uncertainty.