Hospital PMI™ at 63.3%; September 2020 Hospital ISM® Report On Business®

TEMPE, Ariz., Oct. 7, 2020 /PRNewswire/ -- Economic activity in the hospital subsector grew in September for the fourth 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 63.3 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. The Business Activity Index grew at a slower rate, and the New Orders Index increased by 5 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 3 percentage points compared to the August reading of 54.5. The Days Payable Outstanding Index decreased to 54 percent, down 1 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,” says LeMaster.

About This Report

The information compiled in this report is for the month of September 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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ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business^®, PMI^®, NMI^®, Manufacturing PMI^®, Services PMI^™, and Hospital PMI^™ are registered trademarks and trademarks of Institute for Supply Management^®. Institute for Supply Management^® and ISM^® are registered trademarks of Institute for Supply Management, Inc.

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 October 2020 data will be released at 10:00 a.m. ET on Friday, November 6, 2020.

*Unless the New York Stock Exchange is closed.

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SOURCE Institute for Supply Management