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Increasing Demand and Purchasing Activities in Manufacturing

In September, global manufacturers noticeably increased their purchasing of raw materials and components, a clear indication of strengthening demand. The GEP Global Supply Chain Volatility Index, a critical gauge of market conditions affecting demand, shortages, transportation expenses, and inventory levels, offered insights into these trends.

The report, based on a monthly survey of 27,000 businesses, highlighted significant growth in purchasing activity, close to peaking figures of 2026. Notably, all three major regions—North America, Asia, and Europe—experienced pronounced growth with countries such as the United States, Germany, Taiwan, and South Korea showing especially robust expansion in factory purchasing behaviors.

Key Findings from September 2026

Demand Growth

The demand for raw materials and components surged in September, reaching its highest growth rate in four months. This revival reflects the buying intentions of prominent industrial players across various sectors, particularly in the United States and parts of Asia. The data indicates a strategic shift by manufacturers to secure necessary supplies amidst an increasingly competitive landscape.

Inventory Adjustments

Safety stock levels continued to decline as manufacturers reassess their inventory strategies. While current inventory levels remain high, the trend indicates a move towards lower stockpiling as companies adapt to fluctuating demand and rising costs. The historical context shows that while excess inventory was once a preferred strategy to navigate inflation and potential shortages, factors are evolving.

Rising Material Shortages

However, contrary trends emerged as material shortages began to rise for the first time since May. The index reflecting short supply indicators highlighted difficulties in securing critical manufacturing inputs, namely oil and oil-based products, which faced acute shortages contributing to inflationary pressures. This situation poses a significant challenge for manufacturers who rely heavily on these inputs.

Labor and Transportation Costs

Interestingly, reports of backlogged orders due to labor shortages decreased, indicating that workforce constraints are becoming less of an impediment to production. Conversely, global oil prices saw an uptick, which led to increased logistics costs across the board. This development marked a noteworthy shift; for the first time since April, average global transportation expenses have spiked, further complicating the procurement landscape.

John Piatek, VP of GEP Consulting, noted that while manufacturers are responding to heightened demand, they must contend with rising supply costs and transportation challenges. This dynamic calls for a strategic pivot from merely protecting inventory to actively seeking stable supply and managing expenses effectively. As demand continues to build into the year's end, companies that hesitate may encounter tighter constraints and escalated input costs.

Regional Breakdown of Purchasing Activity

• - Asia: The index rose to 1.49, a three-month high, signaling increased activity and tighter supply conditions among Asian manufacturers.
• - North America: With a rise to 1.13, this region experienced its strongest levels of manufacturing activity since June alongside renewed vigor in the U.S. manufacturing sector.
• - Europe: Europe’s index fell to 0.66, indicating the lowest level of disruption in supply chains since March, potentially reflecting a transient easing in pressures amid changing market dynamics.

The GEP Global Supply Chain Volatility Index plays a critical role in interpreting these trends and forecasts. Companies can leverage this data to navigate the complexities of procurement, manage costs effectively, and ensure that they maintain a competitive advantage in the rapidly changing landscape of global business.

For detailed information and a comprehensive understanding, firms can subscribe to GEP services to obtain historical data dating back to January 2005 and insightful future reports.

In conclusion, as we anticipate the final quarter of 2026, manufacturers must remain nimble and proactive. Monitoring demand shifts, addressing supply chain concerns, and effectively managing costs will be essential strategies in overcoming challenges in the ever-evolving marketplace.

For additional insights, visit GEP’s official site for the latest updates and next readings scheduled for November 11, 2026.