Hospital PMI™ at 68.9%
July 2020 Hospital ISM® Report On Business®
(Tempe, Arizona) — Economic activity in the hospital subsector grew in July for the second consecutive month, say the nation’s hospital supply executives in the latest Hospital ISM® Report On Business®.
The report was issued today by Nancy LeMaster, MBA, Chair of the Institute for Supply Management® (ISM®) Hospital Business Survey Committee: “The Hospital PMI™ registered 68.9 percent, up 5.3 percentage points from the June reading of 63.6 percent. This was the second month of growth following two months of decline. The Business Activity Index continued to show growth, but at a slower pace than in June. The varying degrees of COVID-19 across the country is impacting levels of elective procedures performed, which affects overall growth and revenues. The Employment Index indicated growth after three months of contraction. The Case Mix Index remained unchanged in July, with a reading of 61.5 percent. The Days Payable Outstanding Index increased 4 percentage points to 55 percent, compared to the June reading of 51 percent. The Technology Spend Index registered 49.5 percent; a decrease of 1 percentage point from the June reading of 50.5 percent.
“Survey Committee members’ comments highlighted disparities in resumption of elective procedures across the country, with some commenting that their facilities were back to 100 percent of historic levels, while others still had not resumed such procedures. There was consensus agreement that personal protective equipment (PPE) shortages continue to be a problem; one panelist’s comment was typical: ‘COVID-19 continues to dominate the current and future availability of PPE and downstream consumable items in the treatment and care for COVID-19 patients,’ ” says LeMaster.
Hospital PMI™ History
About This Report
The information compiled in this report is for the month of July 2020. The data presented herein is obtained from a survey of hospital supply executives based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.
Data and Method of Presentation
The Hospital ISM® Report On Business® is based on data compiled from hospital purchasing and supply executives nationwide. Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Employment, Supplier Deliveries, Inventories, Prices, Prices: Pharmaceuticals, Prices: Supplies, Backlog of Orders, New Export Orders, Imports, Inventory Sentiment, Case Mix, Days Payable Outstanding, Technology Spend, and Touchless Orders), this report shows the percentage reporting each response and the diffusion index. Responses represent raw data and are never changed.
The Hospital PMI™ is a composite index computed from the following, equally weighted indexes: Business Activity, New Orders, Employment and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. A Hospital PMI™ index reading above 50 percent indicates that the hospital sub-sector is generally expanding; below 50 percent indicates that it is generally declining. For the sub-indexes, except Supplier Deliveries, an index reading above 50 percent indicates that the sub-index is generally expanding; below 50 percent indicates that it is generally contracting. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.
The Hospital ISM® Report On Business® survey is sent out to the Hospital Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on U.S. operations for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the fifth business day of the following month.
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About Institute for Supply Management®
Institute for Supply Management® (ISM®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business®, its highly regarded certification programs and the ISM Mastery Model®. This report has been issued by the association since 1931, except for a four-year interruption during World War II.
The full text version of the Hospital ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the fifth business day* of every month at 10:00 a.m. ET.
The next Hospital ISM® Report On Business® featuring August 2020 data will be released at 10:00 a.m. ET on Tuesday, September 8, 2020.
*Unless the New York Stock Exchange is closed.