Global manufacturers significantly increased their purchases of raw materials and components in September as demand strengthened, but they're doing so amid rising supply shortages and transportation costs that threaten to squeeze availability and inflate input prices in the coming months.
- Global input demand growth reached its strongest level since May, approaching 2026 highs, with particularly robust purchasing in the United States, Germany, Taiwan, and South Korea.
- Supply shortages rose for the first time since May in September, with oil and oil-based products experiencing particularly acute scarcity.
- Global transportation costs increased for the first time since April, driven by climbing oil prices throughout September.
- Manufacturers are prioritizing supply security and cost control over inventory protection as demand strengthens heading into Q4.
- Procurement managers continue holding excess inventory buffers at historically high levels to mitigate inflation and shortage risks.
GEP Global Supply Chain Volatility Index showed global manufacturers ramping up purchases of raw materials and components in September as underlying demand strengthened.
Global input demand growth rose to its strongest since May and was close to its 2026 high, signaling firmer manufacturing activity heading into the fourth quarter. Purchasing strengthened across North America, Asia and Europe, with particularly strong increases in the United States, Germany, Taiwan and South Korea.
At the same time, supply pressures intensified. Shortages increased for the first time since May, while global transportation costs also rose. Shortages of oil and oil-based products were particularly acute, creating renewed cost and availability pressures for manufacturers.
"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," says John Piatek, VP, GEP consulting. "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."
Key takeaways:
- In North America, Index rose to 1.13, from 0.87, its highest level since June, driven by a resurgence in the U.S. manufacturing economy.
- Global manufacturers purchased more raw materials, commodities and components in September. In fact, the rate of growth rose to a four-month high and was close to its 2026 high, reflected stronger buying activity across many large industrial players such as the US, Germany, South Korea and Taiwan.
- Reports of safety buffers being added to inventories fell further during September, marking a sustained reduction since peaking in June. They were still historically high overall, however, signaling that global procurement managers still preferred to hold excesses on hand to mitigate inflation and shortages.
- The items in short supply indicator rose for the first time since May in September, indicating a worsening of availability for critical manufacturing inputs. Underlying data revealed a marked rise in shortages for oil and oil-based products.
- Reports of backlogged orders increasing due to staff shortages fell in September, signaling that workforce capacity was less of a constraint on global supply chains.
- With global oil prices climbing higher throughout September, transportation cost inflation intensified. This marked the first time since April that global logistics prices have increased (on average).
