ISM: Hospital Subsector Grows in September, Business Activity at Slower Rate, New Orders Up

Economic activity in the hospital subsector grew in September for the fourth consecutive month, according to the latest Hospital ISM Report On Business from the Institute for Supply Management.

“The Hospital PMI registered 63.3 percent, down 0.5 percentage point from the August reading of 63.8 percent. This was the fourth month of growth following two months of contraction,” Nancy LeMaster, MBA, chair of the Institute for Supply Management hospital business survey committee, said. “The Business Activity Index grew at a slower rate, and the New Orders Index increased by five percentage points in September. Survey committee panelists’ comments indicated that growth was being driven by an increase in elective procedures and reduced impact of the coronavirus (COVID-19) pandemic. The Employment Index increased slightly in September compared to August. The Case Mix Index decreased to 51.5 percent, down three percentage points compared to the August reading of 54.5. The Days Payable Outstanding Index decreased to 54 percent, down one percentage point from the August reading of 55 percent. The Technology Spend Index registered 59.5 percent, an increase of 6.5 percentage points from the August reading of 53 percent.

“In general, survey committee members were cautiously optimistic, thanks to an overall ability to manage COVID-19 spikes without impeding slow growth in elective procedures. Some panelists expressed concerns and cited negative impacts from the wildfires on the West Coast. Although many comments focused on the ongoing challenge to acquire personal protective equipment (PPE), especially at reasonable prices, there were some indicators that the shortage is easing. One panelist wrote, ‘PPE is beginning to become more available for us to purchase more easily through our direct suppliers.’ For the first time since February, the Inventory Sentiment Index indicated inventories were too high — also a positive sign.”

The Hospital ISM- Report On Business is based on data compiled from hospital purchasing and supply executives in the United States. The Hospital PMI is a composite index computed from the following, equally weighted indexes: Business Activity, New Orders, Employment and Supplier Deliveries.

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