Key Insights: GEP Global Volatility Index June 2025
GEP Global Supply Chain Volatility Index — which tracks conditions, shortages, transportation costs, inventories and backlogs following a monthly survey of 27,000 businesses — jumped to -0.17 in June, from -0.46 in May, its highest in 2025 as worldwide supply chain activity picked up despite the 10% tariffs imposed by The Trump Administration in the US.
For the first time in more than two years, manufacturers in Europe are operating at full tilt, being driven by front-loaded orders from US customers, as well as seeing a rebound in both domestic and export demand, particularly across Germany.
In North America, demand for inputs has surged as the country's manufacturers have moved with speed to secure the inputs – commodities, parts, components and raw materials – ahead of a potential end to the current tariff pause.
Asian markets show recovery signs with regional variations
Supply chains in Asia also showed indications of recovery, with stronger activity in India, Japan and South Korea. However, spare capacity remains across Southeast Asia, where factory purchasing continues to lag, notably in China.
There was also no evidence within the data of the index of cost inflation escalating dramatically, despite the tariffs.
John Piatek, VP, Consulting, GEP, says: "In June, Europe shook off its long slump and global supply chains ran at full capacity — despite the uncertainty and on-and-off again tariffs.
"It's the calm before the storm. Under the surface, companies are putting in place contingencies: stockpiling inputs, reshaping supplier networks, near-shoring operations and securing supply chain financing to mitigate tariffs after the 'pause' ends."
Regional performance highlights manufacturing surge
Asia: Index rises to -0.27 from -0.40, indicating a pick-up in Asian market activity, but the region's supply chains remain underutilised overall. This mostly reflects subdued factory conditions in Southeast Asia.
North America: Index rises to -0.06 from -0.24, as US manufacturers ramp up purchasing sharply ahead of the tariff pause coming to an end. North American supply chains effectively ran at full capacity in June.
Europe: Index rises to 0.01 from -0.30, signalling full capacity utilisation across Europe's supply chains in June as the continent's industrial sector emerges from its prolonged downturn.
UK: Index rises to -0.41 from -0.97, its highest for seven months, but still indicative of an elevated level of slack across the UK's supply chains.
June 2025: key findings
DEMAND: Global factory purchasing activity continued to trend upwards in June, with demand at its most robust in just over a year. This was driven by a considerable rise in North America, particularly the US, as manufacturers ramped up buying ahead of the pause on US tariffs coming to an end.
INVENTORIES: There were increased reports from businesses of a rise in stockpiling due to price or supply concerns during June. Mentions of safety buffers being built into warehouses were their highest so far in 2025 globally, with the prospect of higher tariffs driving procurement managers into precautionary action.
MATERIAL SHORTAGES: The global item shortages indicator, which measures the prevalence of supply problems, remains historically low, indicating robust availability.
LABOUR SHORTAGES: Suppliers' workforce capacity remains sufficient to process current order loads, according to data. Reports of manufacturing backlogs rising due to staff shortages remain stable at historically typical levels.
TRANSPORTATION: Global transportation costs were once again in line with their long-term average in June. Reports from surveyed businesses of logistic cost pressures remain anchored.
How does the GEP Global Supply Chain Volatility Index work?
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.
