Global manufacturing levels rose broadly in February as procurement activity expanded in both capital-intensive and consumer-facing industries, pointing to a cyclical upswing prior to the war in the Middle East, according to a monthly report from GEP.
Broken out by regions, supply chains into Asia showed the busiest levels since October, 2022, due to sharp rises in manufacturing activity in China, Japan, India, South Korea, and Taiwan. However, North American factory input demand softened, reflecting a cooling of U.S. manufacturing growth.
"The war with Iran is already creating an oil supply shock that will disrupt global supply chains," said John Piatek, vice president of consulting at GEP. "Companies need to assess their exposure to energy, petrochemical and shipping costs now, while U.S. manufacturers should also move quickly to proactively secure price reductions from suppliers following the Supreme Court's tariff ruling."
The data came from the New Jersey-based procurement and supply chain solution provider’s “GEP Global Supply Chain Volatility Index,” produced by S&P Global and GEP. It is derived from S&P Global's PMI surveys, sent to companies in over 40 countries, totaling around 27,000 companies. The headline figure is a weighted sum of six sub-indices derived from PMI data, PMI Comments Trackers, and PMI Commodity Price & Supply Indicators compiled by S&P Global.
The February index numbers for the world’s four main manufacturing geographies were:
- ASIA: Index jumps to 0.40, from 0.12, its highest level since October 2022, signaling that supply chains into Asia were their busiest in nearly three-and-a-half years.
- NORTH AMERICA: Index slips from 0.06 to -0.26, signaling underused supplier capacity in North America after a pick-up in January. US factories tapered purchasing activity.
- EUROPE: Index rises to 0.05, from -0.27, indicating further progress in Europe's industrial recovery.
- U.K.: Index increases to -0.01, from -0.17, suggesting that the U.K.'s supply chains are running at full capacity.
To interpret those figures, GEP says that when the index is greater than 0, supply chain capacity is being stretched, and when the index is below 0, supply chain capacity is being underutilized.
Facts Only
Global manufacturing levels rose in February, with procurement activity expanding in capital-intensive and consumer-facing industries.
The GEP Global Supply Chain Volatility Index is produced by GEP and S&P Global, using data from PMI surveys of around 27,000 companies in over 40 countries.
Asia’s index jumped to 0.40 in February, up from 0.12, marking the highest level since October 2022.
North America’s index fell from 0.06 to -0.26, indicating underused supplier capacity.
Europe’s index rose to 0.05 from -0.27, signaling progress in industrial recovery.
The U.K.’s index increased to -0.01 from -0.17, suggesting supply chains are running at full capacity.
The war in the Middle East is expected to disrupt global supply chains due to an oil supply shock.
John Piatek, vice president of consulting at GEP, warned of rising energy, petrochemical, and shipping costs.
U.S. manufacturers were advised to secure price reductions from suppliers following a Supreme Court tariff ruling.
The index is a weighted sum of six sub-indices derived from PMI data, PMI Comments Trackers, and PMI Commodity Price & Supply Indicators.
A positive index value indicates stretched supply chain capacity, while a negative value signals underutilization.
Executive Summary
Global manufacturing activity showed broad growth in February, with procurement expanding across capital-intensive and consumer-facing industries, according to the GEP Global Supply Chain Volatility Index. Asia led the surge, with supply chains reaching their busiest levels since October 2022, driven by increased manufacturing in China, Japan, India, South Korea, and Taiwan. In contrast, North America saw a decline in factory input demand, reflecting cooling U.S. manufacturing growth. Europe and the U.K. showed modest improvements, with Europe’s index rising to 0.05 and the U.K.’s to -0.01, suggesting stabilization in industrial recovery.
The report highlights potential disruptions from geopolitical tensions, particularly the war in the Middle East, which may create oil supply shocks affecting energy, petrochemical, and shipping costs. John Piatek of GEP advised companies to assess their exposure to these risks and urged U.S. manufacturers to secure price reductions following a Supreme Court tariff ruling. The index is derived from S&P Global’s PMI surveys, covering over 27,000 companies across 40 countries, with regional variations indicating divergent economic trends.
Full Take
The strongest version of this narrative presents a nuanced picture of global manufacturing resilience amid geopolitical uncertainty. The data shows Asia’s supply chains thriving while North America cools, with Europe and the U.K. stabilizing. The warning about Middle East conflicts disrupting oil supplies is grounded in observable economic mechanisms—energy costs ripple through petrochemicals and shipping, affecting global trade. The call for U.S. manufacturers to act on tariff rulings adds a layer of actionable insight, framing the report as both diagnostic and prescriptive.
However, the narrative leans on a few unstated assumptions. First, it assumes the Middle East conflict will escalate into a prolonged oil shock, which may or may not materialize. Second, the advice to U.S. manufacturers presupposes that suppliers will readily negotiate price reductions—a claim that lacks empirical support in the text. The report also frames regional disparities (Asia’s growth vs. North America’s decline) as a cyclical upswing, but it doesn’t explore structural factors like labor costs, automation, or trade policies that might explain these trends.
Root cause: This narrative reflects a paradigm of globalized supply chains as inherently fragile, where regional shocks cascade unpredictably. It echoes historical patterns of economic forecasting that prioritize short-term volatility over long-term structural shifts. The focus on procurement and PMI data—while rigorous—risks overshadowing deeper questions about deglobalization, reshoring, or the role of AI in manufacturing efficiency.
Implications: Human agency here lies in proactive risk management—companies that adapt quickly may mitigate costs, while those slow to act could face disruptions. The beneficiaries are likely firms with diversified supply chains and strong negotiating power, while smaller manufacturers or those reliant on single-sourced inputs bear higher risks. Second-order effects could include accelerated nearshoring or increased investment in renewable energy to hedge against oil shocks.
Bridge questions: How might the Supreme Court’s tariff ruling interact with existing trade policies to reshape U.S. manufacturing costs? What evidence would contradict the assumption that Middle East tensions will lead to a sustained oil shock? Are there alternative explanations for North America’s cooling manufacturing sector beyond cyclical trends?
Counterstrike scan: A coordinated influence campaign pushing this narrative might amplify fear of supply chain collapse to justify protectionist policies or energy sector interventions. The actual content, however, presents data-driven analysis without overt alarmism, aligning more with legitimate economic forecasting than manipulation. No structural red flags detected.
Patterns detected: none
Sentinel — Human
The article shows strong signs of human authorship, with natural variability, specific sourcing, and contextual depth typical of professional financial reporting.