Hospital PMI® at 56.3%; December 2024 Hospital ISM® Report On Business®

TEMPE, Ariz., Jan. 9, 2025 /PRNewswire/ — Economic activity in the hospital subsector grew in December for the 16th consecutive month after contracting twice in the previous four-month period, with 35 consecutive months of growth prior to that, 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 56.3 percent in December, a 2.2-percentage point decrease from the November reading of 58.5 percent, indicating a 16th straight month of growth. The Business Activity Index remained in expansion territory for the second straight month. The New Orders Index expanded for the second consecutive month, and the Employment Index returned to expansion territory in December after an ‘unchanged’ reading in November. The Supplier Deliveries Index remained in expansion (which indicates slower delivery performance) for the 16th consecutive month. The Case Mix Index returned to expansion in December, registering 53.5 percent, an increase of 3.5 percentage points from the ‘unchanged’ reading of 50 percent reported in November. The Days Payable Outstanding Index remained in expansion territory in December, registering 51 percent, down 3 percentage points from the 54 percent reported in November. The Technology Spend Index reading of 54.5 percent is a decrease of 4.5 percentage points compared to the 59 percent recorded in November. The Touchless Orders Index remained in expansion territory in December, registering 51.5 percent, up 0.5 percentage point from the 51 percent reported in November.”

LeMaster continues, “Most Hospital Business Survey panelists reported strong demand for services during the month. Some of that demand was offset by staffing shortages and/or postponed elective surgeries related to the ongoing IV solution shortages. Employment increased to meet demand, with some panelists commenting on ongoing efforts to reduce staffing to improve margins. Inventories increased due to a variety of factors, including (1) concern about a potential ports strike, (2) increased inventory of products in short supply and on allocation and (3) year-end budget spend downs. The Supplier Deliveries Index indicated improved delivery performance, but some panelists cited holiday related slowdowns.”

About This Report
The information compiled in this report is for the month of December 2024.

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 Panel 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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You shall not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting Rose Marie Goupil in writing at: ISM Research, Institute for Supply Management, 309 W. Elliot Road, Suite 113, Tempe, AZ 85284-1556, or by emailing rgoupil@ismworld.org; Subject: Content Request.

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^®, 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^®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries manages about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, 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 empowers and leads the profession through the ISM^® Report On Business^®, its highly regarded certification and training programs, corporate services, events, and assessments. The ISM^® Report On Business^®, Manufacturing, Services, and Hospital, are three of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders. For more information, please visit: www.ismworld.org.

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 January 2025 data will be released at 10:00 a.m. ET on Friday, February 7, 2025.

*Unless the New York Stock Exchange is closed.

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SOURCE Institute for Supply Management