U.S. manufacturers slash input purchases as signs point to winter slowdown

Manufacturers across North America sharply reduced their purchases of raw materials and intermediate goods in October, signaling a potential cooling of U.S. factory output heading into the winter months. The data comes from the latest GEP Global Supply Chain Volatility Index, which is derived from a monthly survey of 27,000 companies worldwide.

The index registered –0.33 in October, reflecting continued underutilization of global supply chain capacity and marking the steepest drop in North American input demand since May. According to GEP, manufacturers are keeping inventories tight and cutting back on new orders—moves typically seen as early indicators of slowing production.

The downturn in purchasing follows a period of tariff-driven stockpiling earlier in the year. With those inventory buffers now in place, firms in the region reported both weaker demand for materials and a shift away from deliberate inventory building. The result has been reduced pressure on suppliers, who are now operating well below full capacity.

“North America is seeing the clearest sign yet of a manufacturing pullback,” said Michael DuVall, vice president of consulting at GEP. “Manufacturers are buying less and working down inventories, which points to weaker production through the winter. With spare capacity across global supply, we do not anticipate any price pressure, beyond tariffs, on buyers.”

The broader global picture also showed signs of cooling. Manufacturing momentum in Asia softened as a drop in factory buying in China outweighed continued strength in India. In Europe, activity ticked up only marginally, with suppliers in Germany, France, Italy and the U.K. still operating below capacity as firms continued to restrict raw-material purchases.

For U.S. manufacturers, the October data highlights a shift toward caution after months of elevated purchasing activity. With leaner inventories and reduced ordering, industry analysts expect production levels to moderate—though the extent of the slowdown will depend on year-end demand and the persistence of tariff-related pressures.