Global factories face soaring costs as Iran war causes supply shocks

Asia's factory output expands as firms stockpile buffers over Iran war risks

Asia's factory PMI expanded across China (51.8), South Korea (54.8, five-year high), Japan (54.5), and Vietnam (52.8) in May, driven by precautionary stockpiling ahead of supply shocks from the Iran war. For supply chain and procurement managers, this signals a regional inventory build-up cycle that is masking underlying demand softness — shipping disruptions through the Strait of Hormuz are repricing sourcing risk and accelerating dual-sourcing strategies.