Asian suppliers drive smallest level of spare capacity in global supply chain: report

Asia’s index rose to a four-month high of 0.15, from -0.20.

Global supply chains saw the smallest level of spare capacity from June to November, driven by Asian suppliers, the GEP Global Supply Chain Volatility Index reported. 

The index rose to -0.20, from -0.39 over the said period as Asia recorded renewed growth, particularly due to China's manufacturing rebound. 

The index tracks demand conditions, shortages, transportation costs, inventories, and backlogs based on a monthly survey of 27,000 businesses.

Asia’s index rose to a four-month high of 0.15, from -0.20. It signalled stretched capacity for the first time since the summer as a surge in procurement activity, particularly in China, squeezed vendors.

According to the report, this could reflect greater production requirements from domestic stimulus measures and international clients, who may be stockpiling to mitigate the risk of higher import costs under the Trump administration.

Meanwhile, only India reported a rise in raw material purchases higher than China in November.

Further, ramped-up production was evidenced by the index’s data showing factory procurement activity across Asia rising at its fastest pace for three-and-a-half years.