Economic activity in the U.S. hospital sector continued to expand in February, with the Hospital Purchasing Managers Index (PMI) registering at 56%, marking the 18th consecutive month of growth, according to the latest Hospital ISM Report On Business released by the Institute for Supply Management (ISM).

The February PMI reflects a 2.5-percentage point increase from January’s reading of 53.5%. Business activity and new orders remained strong, while employment levels showed signs of contraction. Supplier deliveries continued to slow, reflecting ongoing logistical challenges, while technology spending saw a decline.

“Patient volumes in February were driven by respiratory-related illnesses, including flu, COVID-19, respiratory syncytial virus (RSV) and norovirus,” said Nancy LeMaster, chair of ISM’s Hospital Business Survey Committee. “Hospital executives also voiced concerns about the potential financial impact of pending tariffs and reductions in federal funding for rural hospitals.”

The employment index, which had shown signs of stabilization in previous months, dipped into contraction territory, with some hospitals reporting minor layoffs while others continued hiring. Veterans Affairs hospitals expressed concerns about staffing challenges due to workforce reductions related to government efficiency initiatives.

Supply chain challenges persisted in some regions due to weather-related disruptions, though overall reports of product shortages remained limited. Hospitals also made concerted efforts to reduce inventory levels despite continued high inpatient volumes.

The next Hospital ISM Report on Business, covering March 2025 data, will be released on April 7, 2025.