ISM: Economic Activity in Hospital Subsector Grows for 16th Consecutive Month



Economic activity in the hospital subsector grew in December for the 16th consecutive month after contracting twice in the previous four-month period, with 35 consecutive months of growth prior to that, according to the latest hospital Institute for Supply Management Report On Business.

The report was issued by Nancy LeMaster, chair of the Institute for Supply Management (ISM) hospital business survey committee.

“The hospital PMI registered 56.3% in December, a 2.2-percentage point decrease from the November reading of 58.5%, indicating a 16th straight month of growth. The business activity index remained in expansion territory for the second straight month. The new orders index expanded for the second consecutive month, and the employment index returned to expansion territory in December after an ‘unchanged’ reading in November,” LeMaster said. “The supplier deliveries index remained in expansion (which indicates slower delivery performance) for the 16th consecutive month. The case mix index returned to expansion in December, registering 53.5%, an increase of 3.5 percentage points from the ‘unchanged’ reading of 50% reported in November. The days payable outstanding index remained in expansion territory in December, registering 51%, down 3 percentage points from the 54% reported in November. The technology spend index reading of 54.5% is a decrease of 4.5 percentage points compared to the 59% recorded in November. The touchless orders index remained in expansion territory in December, registering 51.5%, up 0.5 percentage point from the 51% reported in November.”

“Most hospital business survey panelists reported strong demand for services during the month. Some of that demand was offset by staffing shortages and/or postponed elective surgeries related to the ongoing IV solution shortages,” LeMaster said. “Employment increased to meet demand, with some panelists commenting on ongoing efforts to reduce staffing to improve margins. Inventories increased due to a variety of factors, including (1) concern about a potential ports strike, (2) increased inventory of products in short supply and on allocation and (3) year-end budget spend downs. The supplier deliveries index indicated improved delivery performance, but some panelists cited holiday related slowdowns.”


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