ISM: Economic Activity in Hospital Subsector Grows in July

According to the latest Hospital ISM Report on Business from the Institute for Supply Management, economic activity in the hospital subsector grew in July for the 26th consecutive month.

“The Hospital PMI registered 54.9% in July, a 3.1- percentage point decrease from the June reading of 58%, indicating a 26th consecutive month of growth. The Business Activity and New Orders indexes remained in growth territory; however, the Business Activity Index increased, while the New Orders Index decreased compared to June. The Employment Index also a decreased in July compared to June,” Nancy LeMaster, MBA, chair of the hospital business survey committee at the ISM, said. “The Case Mix Index remained in contraction territory, registering 47.5%, a decrease of one percentage point compared to the June figure of 48.5%. The Days Payable Outstanding Index registered 57%, up 7.5 percentage points from the 49.5% reported in June. The Technology Spend Index registered 53%, a 0.5-percentage point decrease from the June reading of 53.5%.

“Several hospital business survey committee respondents indicated their facilities were again dealing with an increase in COVID-19 cases. The increases generally did not appear severe enough to displace elective procedures, however. Labor and supply costs continue to rise, putting pressure on the supply chain to offset some of those price increases. Shortages of materials such as contrast media and laboratory supplies are easing, but sourcing continues to be a challenge for (1) products containing plastic and (2) medical equipment requiring computer chips. Panelists commented on the challenges related to recruiting and retaining staff, with one attributing an increase in days payable outstanding to the facility’s lack of accounts receivable personnel.”

Hospital PMI History

Month Hospital PMI Month Hospital PMI
July 2022 54.9 Jan 2022 64.1
June 2022 58.0 Dec 2021 63.8
May 2022 56.9 Nov 2021 64.5
April 2022 56.3 Oct 2021 63.4
March 2022 50.4 Sept 2021 60.6
Feb 2022 56.9 Aug 2021 60.4
Average for 12 months – 59.2

High – 64.5

Low – 50.4

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