The GEP Global Supply Chain Volatility Index for May 2025 registered -0.46, a decrease from April's -0.39, indicating growing spare capacity across global supply chains. This shift is primarily attributed to a significant slowdown in Asian manufacturing, which has reached a 17-month low, largely influenced by tariff impacts on China-based suppliers.
Why it matters: The increasing slack in supply chains, especially the pronounced downturn in Asian manufacturing centered on China, suggests that ongoing trade tensions and tariffs are tangibly reshaping global trade dynamics. This environment presents both challenges and opportunities for businesses, necessitating a re-evaluation of procurement strategies, inventory management, and supplier diversification to navigate potential economic decoupling and shifting demand patterns.
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