Asian manufacturing accelerates in February as North America cools

Businesses worldwide face a delicate balancing act.

Asia’s manufacturing sector took off in February, whilst North America showed signs of cooling, the latest GEP Global Supply Chain Volatility Index said.

The index, which tracks demand, shortages, transportation costs, inventories and backlogs through a monthly survey of 27,000 businesses, revealed that global purchases of raw materials and components rose at their fastest rate in nearly four years.

The upswing was broad-based, spanning both capital-intensive and consumer-facing industries, signalling a cyclical recovery before the recent Middle East tensions. Asia led the resurgence, with China, Japan, India, South Korea and Taiwan reporting strong growth in factory purchasing, making February the busiest month for supply chains into the region since October 2022.

In contrast, North American factories saw weaker demand, reflecting a slowdown in US manufacturing, although Canadian producers increased purchases of raw materials for the first time in over a year. Europe’s industrial recovery continued, led by Germany, although supply bottlenecks began to emerge, a pattern also noted in the UK.

“The war with Iran is already creating an oil supply shock that will disrupt global supply chains,” said John Piatek, Vice President of Consulting at GEP. “Companies should assess exposure to energy, petrochemical and shipping costs now, while U.S. manufacturers ought to move swiftly to secure supplier price reductions following the Supreme Court’s tariff ruling.”

Key Regional Highlights – February 2026

Asia: Index rose to 0.40 from 0.12, marking its busiest level in nearly three-and-a-half years.
North America: Index fell to -0.26 from 0.06, signalling underused supplier capacity.
Europe: Index increased to 0.05 from -0.27, indicating continued industrial recovery.
UK: Index moved to -0.01 from -0.17, showing supply chains operating near full capacity.

Globally, manufacturers stockpiled materials less than usual, whilst shortages and labour constraints remained largely in line with historical averages. Transportation costs stayed close to typical levels.