CLARK, N.J. – Global supply chain pressures eased in July as manufacturers reduced precautionary stockpiling and transportation pressures moderated, according to the GEP Global Supply Chain Volatility Index.
The index, which tracks demand conditions, shortages, transportation costs, inventories and backlogs based on a monthly survey of 27,000 businesses, showed supply shortages remained elevated and production backlogs continued to grow.
The findings indicate supply chains had not fully recovered before renewed disruption in the Strait of Hormuz.
The survey was mostly conducted before the latest escalation in the Middle East and renewed disruption to shipping through the Strait of Hormuz, providing a snapshot of global supply chains immediately before energy prices and geopolitical uncertainty increased again.
Manufacturers scaled back safety-stock building in July following a 3 1/2-year peak in the second quarter of 2026, suggesting businesses believed supply risks were beginning to ease. Transportation costs also moderated, helping drive the overall improvement in global supply chain conditions.
Despite the easing, reports of critical items in short supply remained elevated globally, while manufacturers continued reporting rising production backlogs caused by missing materials and components. This indicates supply bottlenecks remain unresolved and could worsen if geopolitical tensions persist.
Demand for raw materials and commodities remained strongest across Asia and North America, where manufacturers continued purchasing inputs at a significantly faster pace than other major regions. Europe, by contrast, remained comparatively subdued, reflecting weaker manufacturing order books and lower inventory building.