Global Supply Chain Pressures Ease in July, but Shortages and Geopolitical Risks Loom
Event summary
- GEP's Global Supply Chain Volatility Index showed easing pressures in July as manufacturers reduced safety-stock building and transportation costs moderated.
- Supply shortages remained elevated, with production backlogs continuing to build due to missing materials and components.
- Asia and North America led global manufacturing demand, while Europe lagged behind due to weaker order books and lower inventory building.
- The survey was conducted before the latest Middle East escalation and Strait of Hormuz disruption, capturing conditions just prior to renewed geopolitical uncertainty.
The big picture
Global supply chains showed signs of easing in July, but the underlying vulnerabilities remain. The data reflects a snapshot before the latest Middle East escalation, highlighting the fragility of manufacturing inputs and transportation networks. With geopolitical tensions on the rise again, the resilience of global supply chains will be tested, particularly as Europe continues to lag behind in demand recovery.
What we're watching
- Geopolitical Risk
- How renewed disruption in the Strait of Hormuz will impact global supply chains and energy prices.
- Regional Demand
- Whether Asia and North America can sustain stronger manufacturing demand compared to Europe's lagging performance.
- Supply Chain Resilience
- The pace at which supply bottlenecks are resolved amid persistent material shortages and production backlogs.