LONDON, April 2 — Factory costs across the world surged sharply in March as the ongoing war involving Iran disrupted supply chains, increased transportation delays, and pushed energy prices higher, according to recent global manufacturing surveys.
Manufacturers reported rising input costs as logistics networks faced significant disruption due to geopolitical tensions in the Middle East. The conflict has affected shipping routes and energy supply, creating bottlenecks in global trade and driving up the cost of raw materials used in production.
Higher oil and gas prices have been one of the main drivers behind the surge in factory costs. As energy prices climbed, many manufacturers were forced to increase the prices of their goods to offset higher production expenses, adding to global inflationary pressure.
Data from manufacturing Purchasing Managers’ Index (PMI) surveys showed that while some regions continued to report moderate industrial growth, the underlying numbers were distorted by supply disruptions. Longer delivery times — often interpreted as a sign of stronger demand — were instead largely caused by logistical delays linked to the conflict.
In Europe, the manufacturing sector continued to expand modestly, with the eurozone PMI rising to around 51.6 in March. However, economists warned that the improvement was partly misleading because the index was boosted by delays in supplier deliveries rather than genuine demand growth.
Asian economies also felt the impact of rising costs and supply disruptions. Countries heavily dependent on imported energy, including several Southeast Asian nations, experienced slower factory activity as companies struggled with higher fuel prices and uncertain global demand.
Analysts noted that the war has significantly increased uncertainty for global manufacturers. Businesses are becoming more cautious about production plans, hiring decisions, and investments due to fears that the conflict could continue to disrupt trade routes and supply chains.
The disruption is particularly concerning because a large share of global oil shipments normally passes through the Strait of Hormuz, one of the world’s most important maritime trade corridors. Any disturbance in the region can quickly impact global energy markets and manufacturing costs worldwide.
Economists warn that if geopolitical tensions persist, the surge in energy prices and logistics disruptions could prolong inflationary pressures and slow global economic growth. Some experts also caution that prolonged supply chain disruptions may weaken business confidence and delay the recovery of the global manufacturing sector.
