The GEP Global Supply Chain Volatility Index for August 2024 reveals the sharpest contraction in global purchasing activity since December 2023, with manufacturers across North America, Europe, and Asia reporting underutilized capacity. The index dropped to -0.37, its lowest level this year, indicating declining demand and excess capacity among global suppliers.

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North America saw the weakest conditions, with U.S. factory demand plummeting, while Europe’s manufacturing recession, driven by Germany and France, continues to intensify. Meanwhile, Asian suppliers, including those in China, experienced spare capacity for the first time since March, though India remained a stronghold. Despite softer conditions, U.K. manufacturers stayed close to full utilization.

The report highlights shrinking global demand, reduced inventories, fewer material shortages, stable labor conditions, and slightly eased transportation costs as manufacturers brace for further economic headwinds. GEP’s President, Neha Shah, urged for lower interest rates and a halt on new tariffs to prevent a prolonged economic slowdown.