MATERIALS SHORTAGES: Reports of item shortages fell once again in June and are now at their lowest level since January 2020.INVENTORIES: Reports from businesses of safety stockpiling were only just above their long-run average in June, indicating little desire among companies to hold excess inventory.DEMAND: Global demand for raw materials, commodities and components weakened to the greatest degree since January, driven by sharper deteriorations in Europe and North America.It's a perfect time for companies' procurement to re-negotiate terms for 20 with suppliers. The softening of demand in the manufacturing sector in the last few months is a leading indicator that the broader economy in the Western hemisphere will slow in the second half of 2023. Purchasing activity across the region is broadly tracking in line with its historical average, with pockets of strength in some Eastern markets led by India, one of the fastest-growing major economies so far in 2023.Ĭommenting on the June data, Joel Johnson, vice president, supply chain consulting, GEP, said: "Weakening demand for components and raw materials in the Western economies, low levels of inventory and excess global supplier capacity suggest that storm clouds are gathering. In contrast, input demand in Asia is showing greater resilience. This in turn led excess capacity at suppliers operating in these regions to rise rapidly and by a larger degree than seen in May. In June, a key finding was the worsening of global demand for raw materials, commodities and components, specifically in Europe and North America, signalling a deteriorated outlook for manufacturing as borrowing costs rise, with risks of spillover effects to the wider economy intensifying.
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