Fearing imminent price hikes and delivery disruptions, businesses worldwide have been stockpiling goods and raw materials, a practice that has triggered shortages and disruptions.
European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs.
“Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president, consulting, GEP, said in a press release.
“What stands out in April’s data is how broadly the disruption is spreading. Shortages worsened across all major regions, signaling that this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption,” Piatek added.
GEP Global Supply Chain Volatility Index
The GEP Global Supply Chain Volatility Index tracks demand conditions, shortages, transportation costs, inventories, and backlogs, based on a monthly survey of 27,000 businesses.
- The Index shows that global supply chain pressures surged in April to their highest level since the pandemic-era disruptions of late 2022.
- The GEP Global Supply Chain Volatility Index jumped to 1.64 in April, from 0.57 in March, its highest reading since October 2022.
Global supply chain pressures surged in April to their highest level since the pandemic-era disruptions of late 2022, per the release. The war in the Middle East has fueled inflation fears, shortages, and aggressive stockpiling by manufacturers worldwide.
Supplier Backlogs Trigger Shortages and Stockpiling
Shortages of goods and materials this year — the highest since November 2022 — were exacerbated by inventory stockpiling that intensified pressure on suppliers, GEP reported.
Asia reported the sharpest deterioration in supply chain conditions during April, driven by surging transportation costs, worsening shortages, and rising purchasing activity. Bottlenecks also intensified significantly across Europe and North America.
Global transportation costs climbed to a record high in April, reflecting maritime disruption, soaring fuel prices, and logistical challenges linked to the war in the Middle East.
Businesses globally ramped up safety stockpiling of goods and raw materials at the fastest rate since the pandemic, seeking to secure supply ahead of further price rises and disruption. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs.
When inventory exceeds storage capacity, the congestion slows operations, reduces productivity, and creates safety hazards.
Fuel Prices, Logistics, Global Transportation Costs
Asia reported the sharpest deterioration in supply chain conditions during April, driven by surging transportation costs, worsening shortages, and rising purchasing activity. Bottlenecks also intensified significantly across Europe and North America.
Global transportation costs climbed to a record high in April, reflecting maritime disruption, soaring fuel prices, and logistical challenges linked to the war in the Middle East.
Stockpiling Fallout
- Warehousing: Available storage space fills fast in prime areas. Despite higher vacancy rates, warehouse rents remain high, and last-mile costs continue to dominate the logistics budget, according to Cahoot.com.
- High Carrying Costs: Excessive inventory is costly to store, insure, and finance.
- Risk of Future Excess: Excessive inventory is also risky. If demand drops, firms that have aggressively front-loaded purchases could end up with massive amounts of unsold inventory later in the year.
- Worsened Shortages for Others: Smaller firms often cannot afford to make large forward purchases, resulting in a disproportionate impact on them.
GEP: April 2026 Regional Key Findings
- ASIA: Index soars to 3.79, from 1.16, its highest in more than four years. Surging transportation costs were a key factor behind the index’s increase, with the region more reliant on Middle East oil than other parts of the globe.
- NORTH AMERICA: Index jumps to 1.52, from 0.42, a 44-month record. Manufacturers in the U.S. and Canada purchased more materials to build inventories, leading to a sharp squeeze on supply chain capacity in the continent.
- EUROPE: Index rises to 1.64, from 0.64, a three-and-a-half-year high, as European manufacturers’ safety stockpiled more than any other part of the globe.
- U.K.: Index rises to 0.96, from 0.16, its highest reading since December 2022.
GEP: April 2026 Key Findings
- DEMAND: Global demand for production inputs such as raw materials, commodities, and intermediate goods rose in April, with purchasing its strongest in more than four years. The expansion reflected front-loaded buying activity in anticipation of price inflation and supply disruptions, rather than growth driven by improving underlying manufacturing conditions.
- INVENTORIES: To mitigate further price increases and supply disruptions, global manufacturers built inventory buffers more aggressively. Reports of safety stockpiling surged in April and were the most widespread since January 2023, as oil prices remained volatile and uncertainty over the war in the Middle East continued.
- MATERIAL SHORTAGES: The items in short supply indicator rose again in April to its highest in nearly three-and-a-half years, signaling that shortages of critical materials and inputs were the highest since late 2022, toward the end of the post-pandemic supply squeeze.
- LABOR SHORTAGES: Labor shortages remained contained in April, although they were marginally above the long-run average globally. By region, reports of rising manufacturing backlogs due to staff shortages were highest in Europe.
- TRANSPORTATION: The global transportation costs tracker soared to a record high in April (data collection began in 2005), reflecting surging fuel prices and rising maritime shipping and freight rates.
For more information, visit the www.gep.com/volatility.
About GEP Global Supply Chain Volatility Index
The GEP Global Supply Chain Volatility Index is 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.
About GEP
GEP® delivers AI-powered procurement and supply chain solutions that help global enterprises become more agile and resilient, operate more efficiently and effectively, gain a competitive advantage, boost profitability, and increase shareholder value.
GEP helps global enterprises operate more efficiently and effectively, gain a competitive advantage, boost profitability, and maximize business and shareholder value. Every day, all over the world, GEP helps performance-driven enterprises realize their strategic, operational, and financial objectives.
Headquartered in Clark, New Jersey, GEP has offices and operations centers across Europe, Asia, Africa and the Americas. To learn more, visit www.gep.com.
