Hospital PMI(TM) at 63.8%; August 2020 Hospital ISM® Report On Business®
TEMPE, Ariz., Sept. 8, 2020 /PRNewswire/ -- Economic activity in the hospital subsector grew in August for the third 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 63.8 percent, down 5.1 percentage points from the July reading of 68.9 percent. This was the third month of growth following two months of decline. Each of the subindexes (Business Activity, New Orders, Employment and Supplier Deliveries) that directly factor into the Hospital PMI™ continued to show growth, but at slower rates than in July. Survey Committee panelists' comments indicated that the varying degrees of COVID-19 across the country are impacting levels of elective procedures performed, which affects overall growth and revenues. The Case Mix Index decreased to 54.5 percent, down 7 percentage points compared to the July reading of 61.5. The Case Mix Index change is consistent with slower growth in surgical cases. The Days Payable Outstanding Index was unchanged at 55 percent. The Technology Spend Index registered 53 percent, an increase of 3.5 percentage points from the July reading of 49.5 percent.
Although the growth rate in August was slower than in July, there was no consensus among Survey Committee members as to the cause. Some attributed the slowdown, directly or indirectly, to the coronavirus (COVID-19) pandemic, while one respondent cited normal seasonal variation. However, participants agreed that sourcing and procuring personal protective equipment (PPE) remains a struggle. One respondent commented, 'Medical supplies, particularly PPE, are still in short supply, with an unprecedented level of distributor allocations. My facility needs to purchase certain PPE outside of normal distribution channels, at higher-than-contract cost, to remain operational,' " says LeMaster.
Hospital PMI™ History
Average for 12 months – 57.6
High – 68.9
Low – 45.1
About This Report
The information compiled in this report is for the month of August 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 September 2020 data will be released at 10:00 a.m. ET on Wednesday, October 7, 2020.
*Unless the New York Stock Exchange is closed.
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SOURCE Institute for Supply Management