Starting 2024 right: Asia’s supply chains at their busiest in nearly a year

China, South Korea, and India led the rebound.

Asia’s supply chains were at their busiest in nearly a year in January as demand from major exporting nations picked up and manufacturers geared up for expansion, according to an industry tracker by GEP and S&P Global.

The GEP Supply Chain Volatility Index for Asia rose to 0.14 that month from the -0.42 reading last December, indicating higher activity across the region’s supply chains. Suppliers had been consistently posting excess capacity each month from September through December 2023 according to the report.

Worldwide, Asia led the recovery with excess global supply chain capacity shrinking to its lowest level in nine months, as the global index eased to -0.12 in January from -0.44 the month before. The improvement is seen as an early sign of recovery for global manufacturing, according to the report.

“With input demand trending higher, led by Asia, signalling a return to positive growth in the coming months, it is imperative business keeps tamping down suppliers’ price increases so inflation continues to trend down,” said Daryl Watkins, senior director, of consulting at GEP.

The monthly index tracks demand conditions, shortages, transportation costs, inventories and backlogs of supply chains across the globe.

A reading above 0 signals higher utilisation and volatility in the supply chains, and a reading below 0 indicates factories are being underutilized, resulting in less volatility in the supply chains.