Rising geopolitical tension and trade restrictions are driving record levels of concern among procurement professionals, according to new CIPS survey data. But behind the headline risks, a more complex recalibration is unfolding, one that challenges assumptions about resilience, inflation, and global sourcing models.
Tariffs and Regional Instability Redefine Risk Baselines
The Q2 2025 CIPS Pulse Survey, compiled from senior procurement and supply chain professionals across key sectors, including healthcare, banking, manufacturing, and public services, confirms a sharp uptick in concern over both short- and long-term disruptions. The average near-term risk score rose to 4.57 out of 7, up from 4.36 in Q1, while the 12-month outlook jumped to 5.03, both record highs since the index was established.
This heightened alert reflects mounting pressures from escalating Middle East conflicts and a new wave of U.S. tariffs affecting a broad swath of global trade flows. “We’re seeing volatility that procurement teams haven’t had to manage at this scale in recent memory,” said Dr. John Glen, CIPS Economist in an official statement. He emphasized that tariffs are not isolated cost events, they cascade through multi-tiered supplier networks, amplifying uncertainty.
The cost impact is already materializing. Five key spending categories are expected to face input price increases of over 10%, compared to just three in Q1. Shipping and logistics, petroleum and mining, and chemicals and pharmaceuticals top the list. These pressures risk locking in inflation across supply chains even as consumer demand remains fragile in many developed economies.
Structural Confidence Erodes Despite Mitigation Efforts
Beyond pricing, the survey reveals a significant shift in what procurement leaders perceive as controllable. While inflation concerns dropped from 59% in Q1 to 41% in Q2, geopolitical and policy-driven threats surged. More than half of respondents cited geopolitical instability as the root cause of current supply shortages, and 36% specifically pointed to U.S.-China tensions.
This pivot suggests that decision-makers are no longer merely bracing for cyclical market shifts, they are recalibrating for a new operating environment. Efforts to widen supplier bases and expand nearshoring have yet to restore confidence. As CIPS CEO Ben Farrell put it: “This isn’t about responding to a single shock, it’s about building systems that assume disruption as the default.”
New policy tools may also complicate mitigation strategies. Export restrictions on strategic inputs like rare earths, fertilizer, and semiconductors are narrowing sourcing options in multiple regions. Even sectors once considered relatively insulated, such as healthcare, are facing heightened risk exposure due to medicine and chemical shortages, particularly in Europe.
Resilience Without Foresight Risks Becoming Reactive
As disruption becomes the baseline, the temptation is to respond faster, but speed alone can reinforce short-termism. The harder task now is to distinguish between volatility that requires adaptation and noise that encourages overcorrection. Building supply strategies that can absorb shocks without constantly reshaping around them may prove more durable than the endless pursuit of agility.