Manufacturers increased raw material purchases in September as demand strengthened, signaling tighter supply and rising transportation costs.
Global manufacturers increased purchases of raw materials, commodities, and components in September as underlying demand strengthened, according to the latest GEP Global Supply Chain Volatility Index. The rebound comes as supply pressures return, material shortages increased for the first time since May, and transportation costs climbed for the first time since April.
GEP and S&P Global produce the index, which draws on S&P Global's PMIR surveys of around 27,000 businesses in more than 40 countries. It is a leading indicator that tracks demand conditions, shortages, transportation costs, inventories, and backlogs. For shippers, freight forwarders, and importers heading into the fourth quarter, the September data shows demand building while costs and availability tighten.
Global input demand growth rose to a four-month high in September, its strongest since May and close to its 2026 peak. The data points to firmer manufacturing output in the fourth quarter.
Purchasing strengthened across all three major regions: North America, Asia, and Europe. The United States, Germany, Taiwan, and South Korea recorded particularly strong increases in factory buying. These four large industrial economies drove much of the global gain.
For cargo owners, stronger factory buying usually means more inbound materials, more outbound finished goods, and more competition for capacity across ocean, air, ground, and rail networks.
Supply conditions moved in the opposite direction from demand. The index's measure of items in short supply rose for the first time since May, signaling that critical manufacturing inputs became harder to secure.
Shortages of oil and oil-based products were particularly acute, as an intensified energy crisis hit those markets. The squeeze created renewed cost and availability pressures for manufacturers that depend on petroleum-derived inputs.
Transportation costs also rose. Global oil prices climbed throughout September, and transportation cost inflation intensified as a result. It was the first month since April that global logistics prices rose on average. For shippers and importers already focused on total landed cost, higher fuel-driven freight rates add a fresh layer of budget pressure just as volumes begin to build.
A reading above zero means supply chain capacity is being stretched. The further above zero, the more stretched supply chains are. A reading below zero means capacity is being underutilized.
* Asia: The index rose to 1.49 from 1.24, a three-month high, as stronger demand from Asian factories coincided with tighter supply conditions.
* North America: The index rose to 1.13 from 0.87, its highest level since June, driven by a resurgence in the U.S. manufacturing economy.
* Europe: The index fell sharply to 0.66 from 1.27, the lowest level of supply chain disruption across the continent since March.
* U.K.: The index dropped to 0.59 from 1.10, as U.K. manufacturers pared back stockpiling activity and eased supply pressure.
The regional picture is uneven. Asia and North America are absorbing higher demand alongside tighter conditions. Europe and the U.K. saw supply chain pressure ease, even as purchasing across Europe strengthened.
Inventory Buffers Shrink but Remain Elevated
Reports of manufacturers adding safety stock to inventories fell further in September, continuing a steady decline since the June peak. Overall, safety stock levels remain historically high. Procurement managers continue to hold extra inventory to guard against inflation and shortages.
For importers managing cash flow, the trend matters. Firms are trimming excess buffers, but few are abandoning protective stock as shortages and costs rise again.
Workforce capacity weighed less on global supply chains in September. Reports of backlogged orders rising because of staff shortages fell during the month. This offers some relief as demand strengthens, because labor is a smaller bottleneck than oil-based inputs and freight costs.
John Piatek, vice president at GEP Consulting, said the September data marks a turning point in procurement strategy.
"Manufacturers are buying more because demand is strengthening, but they're doing so at a time when shortages and transportation costs are starting to rise again," Piatek said. "For companies, that means the priority shifts from simply protecting inventory to securing supply and controlling costs. If demand continues to build through the fourth quarter, businesses that wait will face tighter availability and higher input costs."
The September findings point to a more demanding fourth quarter. Rising purchasing, renewed shortages of oil and oil-based products, and the first increase in global logistics prices since April together signal tighter conditions for cargo owners.
For shippers, the immediate priorities are locking in reliable capacity and gaining clear visibility into freight costs before demand peaks. Freight forwarders face growing client demand for routing options that can absorb fuel-driven rate increases. Importers face rising pressure on landed costs as inventory buffers shrink and input prices climb.
Taken together, the data shows a market moving from caution toward expansion. Organizations that plan early, secure supply, and manage costs with discipline will be best positioned to keep their customer commitments through year-end.
