Key Insights: GEP Global Volatility Index January 2026

GEP Global Supply Chain Volatility Index – a leading indicator tracking demand conditions, shortages, transportation costs, inventories and backlogs, based on a monthly survey of 27,000 businesses – showed a marked bounce back in procurement activity in January.

For many of the world's biggest economies, procurement activity expanded, which saw the strongest rise in worldwide demand for commodities, raw materials and components in almost four years.

Asian manufacturing powers broad-based recovery

A number of industrial firms in major economies including China, Japan, Korea, India and across ASEAN markets underpinned the expansion – showcasing a broad-based strength across the region.

In North America, momentum has been gained into the new year, after seeing a slowdown through the final quarter of 2025. This was driven by a pick-up in the US' manufacturing economy. Factory leaders across the continent also showed a greater appetite for inventory building, suggesting a certain degree of confidence in order pipelines.

In Europe, firms within the manufacturing sector are still showing nervousness to overstock warehouses. A cooling of the downturn in purchasing activity, however, tentatively points to an improving outlook.

"After several months of treading water, January's data points to a broad-based recovery across US manufacturing, spanning all sectors," says John Piatek, Vice President, Consulting, GEP.

"Despite tariffs and trade uncertainty, manufacturers are showing real resilience, supported by a declining cost of capital that's giving procurement teams greater flexibility to adjust sourcing and inventories."

January 2026: Regional key findings

Asia: Index rises to 0.12, from -0.20, signalling that the supply chains of Asia's manufacturers were their busiest since November 2024 in January.

North America: Index rises to 0.06, from -0.37, indicating capacity at North America's suppliers was the most stretched in just over a year-and-a-half.

Europe: Index dropped to -0.27, from -0.17, signalling greater spare capacity at Europe's suppliers than at the end of 2025.

UK: Index fell to -0.17, from 0.12, pointing to a weakening of the UK's manufacturing sector as its supply chains were underutilised at the start of 2026.

January 2026: Key findings

Demand: Global demand for commodities, raw materials and intermediate goods rose by its strongest margin in almost four years during January, as manufacturers in major economies stepped up their purchasing activity at the start of 2026. Asia was a key component of this upturn, with buying growth seen in China, Japan, Korea, India and across ASEAN, although US manufacturers also expanded procurement.

Inventories: Globally, reports of manufacturers intentionally stockpiling due to price or supply worries were muted. This suggests that procurement leaders are not overly concerned about product price inflation or supply. Regional differences emerged, however, with inventory building rising in North America, whereas destocking continued in Europe.

Material Shortages: The global items in short supply indicator stayed below its long-run average, as has been the case for nearly two-and-a-half years. This means that global businesses are experiencing shortages less frequently than normal.

Labour Shortages: Labour is not a limiting factor for global production, as global manufacturers' reports of backlogs increasing due to a lack of staff were below historically typical levels during January.

Transportation: With global oil prices rising in January, the latest data pointed to an increase in transportation costs at the start of the year.

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.