Hospital PMI™ at 61.3%
May 2021 Hospital ISM® Report On Business®
(Tempe, Arizona) — Economic activity in the hospital subsector grew in May for the 12th 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 61.3 percent in May, down 0.6 percentage point from the April reading of 61.9 percent, indicating a 12th consecutive month of growth. The Business Activity Index decreased in May compared to April. The New Orders Index saw a slight increase in May, while the Employment Index moved into contraction. The Days Payable Outstanding Index decreased to 50.5 percent, down 6.5 percentage points from the April reading of 57 percent. The Technology Spend Index registered 48.5 percent, a decrease of 6.5 percentage points from the April reading of 55 percent.
“In May, hospitals continued to see growth driven by an increase in outpatient and elective procedures. There was only one reference to a localized increase in coronavirus (COVID-19) patients. Business Survey Committee panelists commented on the continuing challenges with obtaining supplies. Many indicated they are still impacted by port congestion and are dealing with product substitutions. Although some panelists indicated better availability of personal protective equipment (PPE); however, there were comments on shortages and delays related to the global semiconductors manufacturing backlog. Employment contracted this month, and comments from panelists included ‘more open positions due to retirements,’ ‘harder to get employees,’ and ‘trying to replace temporary staff with permanent staff.’ Panelists also indicated they are continuing to burn off excess inventories and looking at reducing discretionary spending to improve profitability,” says LeMaster.
Hospital PMI™ History
About This Report
The information compiled in this report is for the month of May 2021.
The Hospital PMI™ was developed in collaboration with the Association for Health Care Resource & Materials Management (AHRMM), an association for the health care supply chain profession, and a professional membership group of the American Hospital Association (AHA).
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, 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. Beginning in January 2021, the Report On Business® staff and consultants are gathering market information to better validate the Exports Index. Exports Index data are still being collected.
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 June 2021 data will be released at 10:00 a.m. ET on Thursday, July 8, 2021.
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