Key Insights: GEP Global Volatility Index November 2025

The GEP Global Supply Chain Volatility Index – a leading economic indicator drawn from monthly surveys of 27,000 businesses – shows in its latest release that supply chains across the world remained underutilised in November, as manufacturers continue to limit purchasing – pointing to a weakened outlook for the start of 2026.

The index, which tracks demand conditions, shortages, transportation costs, inventories and backlogs, registered –0.29, pointing towards another month of 'slack' capacity for suppliers across the globe.

North America sees sharpest pullback amid weakened demand

The index shows that the sharpest pullback came from North America, as the regional index fell – driven by input demand growing smaller, as manufacturers cut orders ahead of the new year.

The index also shows that, in Asia, supply chains continue to be underutilised, with firms holding back on purchasing. GEP says this was driven, in large part, by a further pullback in Chinese factory buying amid soft global demand.

But there were some areas of strength in the region, particularly in the south-east of Asia.

Over in Europe and the UK, spare capacity was once again high, as demand fragility persisted. In French and German factories, there was once again a display of reticence to expand purchasing, with firms instead looking to make their cutbacks more aggressive.

Global excess capacity indicates companies will experience minimal purchasing cost pressures in coming months, apart from tariff impacts. Shortages are scarce, stockpiling remains subdued and manufacturing backlogs are mostly unchanged – pointing to a supply landscape marked by slack rather than strain.

"Companies are watching the US Supreme Court closely and most expect a pause or rollback in tariffs," says John Piatek, Vice President, Consulting at GEP.

"With supply chains this slack, it remains a buyers' market heading into 2026, and companies have real leverage to secure favorable terms for the year ahead."

November: Regional key findings

Asia: Index rose to -0.16, from -0.30, signalling less spare capacity than in October across Asia's supply chains. While China remained a drag, ASEAN countries such as Indonesia and Vietnam were resilient.

North America: Index fell to -0.53, from -0.45, indicating the highest degree of underutilised supplier capacity since March. The data point to a weakening near-term outlook for North American manufacturing.

Europe: Index dipped to -0.33, from -0.25, highlighting ongoing fragility across Europe's industrial economy.

UK: Index rose sharply to -0.20, from -0.80, its highest level in a year, hinting at a stabilising of the country's manufacturing downturn.

November: Key findings

Demand: Global factories' purchases of commodities, intermediate goods and other components necessary for production slowed again in November. The slump reflected a pullback in factory buying across China, demand-side manufacturing weakness in the US and a persistent drag from major European industrial economies such as Germany.

Inventories: Reports from global procurement managers of an increase in stockpiling due to price or supply fears remained historically low, indicating limited concern about purchasing price inflation or shortages. The data continue to demonstrate a preference among manufacturers for lean warehouses.

Material Shortages: The global item shortages tracker remained well below its long-term trend level, signalling healthy supply levels for the world's manufacturers. Factories will have little, if any, challenges in sourcing vendors for commodities, components and other intermediate products.

Labour Shortages: The labour shortages tracker remained only marginally above its long-term trend during November, indicating negligible pressures on production capacity due to a lack of workers.

Transportation: Global transportation costs ticked higher in November but recorded broadly in line with their historical average.

How GEP's index works 

The GEP Global Supply Chain Volatility Index is a collaborative effort between S&P Global and GEP.

It draws from S&P Global's PMI surveys, which are distributed to 27,000 companies worldwide, a weighted aggregation of six sub-indices derived from PMI data, PMI Comments Trackers and PMI Commodity Price & Supply Indicators provided by S&P Global.

A positive value in the GEP Global Supply Chain Volatility Index indicates strained supply chain capacity, leading to increased volatility. The higher the value, the greater the strain on capacity. 

Conversely, a negative value suggests underutilised supply chain capacity, resulting in reduced volatility. The lower the value, the greater the degree of capacity underutilisation.

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 underutilised, reducing supply chain volatility. The further below 0, the greater the extent to which capacity is being underutilised.