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In Europe and the US, demand for raw materials and components is no longer falling as rapidly as companies have successfully drawn down some of their excess warehoused stocks.
Global demand for raw materials and components remains subdued, but the trend is improving. In some parts of the world, such as Asia, companies are raising their purchases, with manufacturers in China and India primarily driving this, as per the report.
Global businesses are reducing their safety stocks as supplier lead times quicken and concerns surrounding pricing and supply fade. Reports of safety stockpiling are at their lowest since July 2020.
Labour shortages have had little adverse effect on suppliers since the start of 2023, indicating that current staffing is adequate to cope with demand. Business reports of item shortages are at their lowest since September 2020.
Global transportation costs have fallen just below their long-term average as pressures on shipping, rail, air, and road freight have subsided.
Supply chains are operating efficiently in the UK and North America. In Europe and Asia, supply chain conditions here have almost completely normalised.
“A period of decreased demand has helped resolve the supply issues of material and labour shortages, and stockpiling, and we’re now seeing early signs of improving demand. Despite high interest rates, demand for raw materials and components increased across Asia and declines eased across the US and Europe, so now is a good time for companies to lock in prices and key terms with suppliers for the coming months, which will also help tap down inflation,” said Binayak Shrestha, global head of services delivery, GEP.
Fibre2Fashion News Desk (DP)