Supply Chain

Global Manufacturing Surge in May: First Positive Movement in 14 Months

Global Manufacturing Surge in May: First Positive Movement in 14 Months

Sedat Onat
Global Manufacturing Surge in May: First Positive Movement in 14 Months

Global manufacturing activity surged in May, moving in a positive direction for the first time in 14 months, presenting a "strong outlook" for the second half of 2024. According to the "GEP Global Supply Chain Volatility Index" report from GEP, a New Jersey-based software vendor, this increase emerged from tracking demand conditions, supply shortages, transportation costs, inventories, and order backlogs through a monthly survey of 27,000 businesses.

\n


\n

The results, converted into a single index figure, rose to 0.21 in May, surpassing the April value of -0.18. This marks the first time since March 2023 that the index has moved in positive territory, indicating that global suppliers are operating at capacity and supply chains are in their most congested period of the past year.

\n


\n

According to GEP, the key factor behind the index increase in May was further improvement in global manufacturing demand. This situation led factories to increase their purchases of raw materials, commodities, and components. In particular, procurement growth in Asia was strong among major exporting nations such as China, India, and South Korea.

\n

Suppliers to North America also became busier in May, with their capacity stretched somewhat. This partly reflected more supportive demand conditions for businesses in the US and Mexico. The European market, despite having lagged since mid-2022, showed significant improvement in May but remains in negative territory.

\n


\n

Mudit Kumar, Vice President of GEP Consulting, said: "The broad-based surge we saw in May is a highly encouraging sign for the global economy as we enter the second half of 2024. If this trend continues, businesses, particularly in light of the recent cost increases in many commodities, will likely see renewed efforts by suppliers to raise prices."

\n


\n


\n
Key Takeaways
\n
    \n

  1. Global Manufacturing Growth: Significant growth in global manufacturing activity occurred in May.

    2. \n

  2. First Positive in 14 Months: The index moved in positive territory for the first time in 14 months.

    3. \n

  3. GEP Index: GEP's Global Supply Chain Volatility Index is based on monthly surveys of 27,000 businesses.

    4. \n

  4. Index Increase: The index rose from -0.18 in April to 0.21 in May.

    5. \n

  5. Asia Growth: Procurement growth was strong in countries such as China, India, and South Korea.

    6. \n

  6. North American Demand: Demand conditions became more supportive in the US and Mexico.

    7. \n

  7. European Recovery: The European market showed significant improvement in May but remains in negative territory.

    8. \n

  8. Price Increases: Price increases from suppliers are expected due to rising commodity costs.

    9. \n

  9. Future Outlook: A strong economic outlook is projected for the second half of 2024.

    10. \n
\n


\n

News Link: https://www.thescxchange.com/articles/10416-gep-report-global-manufacturing-activity-jumped-in-may

Comments