Hospital PMI® at 53.5%; February 2023 Hospital ISM® Report On Business®

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Mar 07, 2023, 10:00 ET

TEMPE, Ariz., March 7, 2023 /PRNewswire/ -- Economic activity in the hospital subsector grew in February for the 33rd 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 53.5 percent in February, a 1-percentage point increase from the January reading of 52.5 percent, indicating a 33rd consecutive month of growth. The Business Activity Index increased compared to January, while the New Orders Index decreased compared to the prior month. The Employment Index moved back into growth territory after contracting in January. The Case Mix Index registered 51.5 percent, a decrease of 5 percentage points compared to the January figure of 56.5 percent. The Days Payable Outstanding Index registered 55 percent, up 2 percentage points from the 53 percent reported in January. The Technology Spend Index registered 53 percent, the same reading as reported in January."

LeMaster continues, "The majority of Business Survey Committee respondents remarked that demand for elective procedures increased during the month. With increased employment, hospitals were able to expand capacity to meet this demand. Exceptions to this trend were facilities in parts of the country that experienced severe weather, which reduced volumes and disrupted supplier deliveries. Overall, supplier deliveries were faster, but hospitals continue to be plagued with product shortages, back orders and discontinued products. These issues were particularly evident for products made of resin. Increases in supply and labor costs continued to put pressure on hospital margins. Some facilities addressed margin challenges, panelists indicated, with efforts to reduce waste and streamline processes. In some cases, there were layoffs. One panelist indicated that in spite of an inflationary economy, the organization continued to invest in new construction and technology."

*Hospital PMI^® History*

*Month*	*Hospital PMI*^®	*Month*	*Hospital PMI*^®
Feb 2023	53.5	Aug 2022	53.5
Jan 2023	52.5	Jul 2022	54.9
Dec 2022	57.0	Jun 2022	58.0
Nov 2022	57.5	May 2022	56.9
Oct 2022	51.0	Apr 2022	56.3
Sep 2022	57.9	Mar 2022	50.4
Average for 12 months – 55.0 High – 58.0 Low – 50.4

About This Report
The information compiled in this report is for the month of February 2023.

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^® Advance^™ Digital Platform. The ISM^® Report On Business^® has been issued by the association since 1931, except for a four-year interruption during World War II.

The text version of the public 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 March 2023 data will be released at 10:00 a.m. ET on Friday, April 7, 2023.

*Unless the New York Stock Exchange is closed.