- Global manufacturing activity surges to its highest level of 2025 despite 10% U.S. tariffs.
- Europe reaches full capacity for the first time in two years, driven by demand from U.S. and Germany.
- Asian and North American supply chains near full capacity, though Southeast Asia lags.
The GEP Global Supply Chain Volatility Index indicated a significant rebound in global manufacturing activity in June 2025, climbing to -0.17 from -0.46 in May. This rise represents the strongest performance recorded in 2025, suggesting that global supply chains are operating near full capacity despite the 10% tariffs imposed by the U.S.
European supply chains demonstrated noteworthy resilience, achieving full capacity utilization for the first time in over two years with an index reading of 0.01. This was driven by a surge in orders from U.S. customers anticipating the end of the tariff pause, coupled with a revival in German domestic and export demand.
In North America, the index rose to -0.06 as U.S. manufacturers increased purchasing activity for commodities and raw materials. This strategic inventory build-up reflects a proactive approach to securing inputs ahead of potential changes to the current tariff pause.
Asian markets showed recovery signs, with an index improvement to -0.27, led by increased activity in India, Japan, and South Korea. However, Southeast Asia, especially China, continues to face underutilization in factory purchasing.
Remarkably, despite the ongoing tariff situation, the data indicates no significant cost inflation. Transportation costs have remained consistent with historical averages, possibly due to strategic trade flow rerouting and competitive pricing efforts by companies to retain market share.
The findings underscore a global trend toward stockpiling and strategic adjustments in supply chain structures. Companies are adapting by reshaping supplier networks, near-shoring operations, and strengthening supply chain financing to navigate policy uncertainties effectively.
