The GEP Global Supply Chain Volatility Index surged to a three-year high of 0.57 in March 2026, jumping sharply from 0.09 in February. Based on a monthly survey of 27,000 businesses by S&P Global and GEP, this leading indicator reveals that global supply networks are under the most severe strain since January 2023. A reading above zero signifies that supply chain capacity is being stretched, and the recent spike reflects the immediate economic fallout from maritime disruptions and energy price shocks triggered by the escalating conflict in the Middle East. Consequently, global manufacturers are aggressively increasing safety stockpiling at the highest rate in three years while cutting overall purchasing volumes due to mounting uncertainty.
The wartime disruption has heavily impacted logistics, pushing global transportation costs to a four-year high fueled by surging oil prices. Despite softer overall demand, item shortages have also hit a three-year peak. Manufacturers are reporting rapidly deteriorating availability for critical inputs, including energy-intensive metals like aluminum and copper, as well as polymers, PVC, and rubber. Labor shortages are compounding the issue, with reports of accumulating backlogs reaching a three-month high.
The strain is being felt universally, but the GEP Global Supply Chain Volatility Index highlights distinct regional pressures:
- Asia: The regional index jumped significantly to 1.16, the highest since August 2022, driven largely by the region’s heavy reliance on Middle Eastern oil.
- Europe: Climbing to 0.64, European manufacturers are reporting the most intense supply chain pressure and aggressive stockpiling activity since January 2023.
- North America: The index rose to 0.42, marking a 39-month high and signaling the strongest capacity pressure since December 2022.
Industry experts at GEP advise companies to secure supplies strategically where it matters most, cautioning against broad stockpiling that could lock in inflated costs during this volatile period.
References
- gep.com: Middle East War Drives Global Supply Chain Pressures to a Three-Year High
- european-rubber-journal.com: Rubber hit as Middle East war drives supply chain pressures to three-year high
- prnewswire.com: MIDDLE EAST WAR DRIVES GLOBAL SUPPLY CHAIN PRESSURES TO A THREE-YEAR HIGH
