Hospital Economic Activity Continues Growth Trend in November 2024 Report
In a recent report released by the Institute for Supply Management® (ISM®), the Hospital PMI® reached 58.5 percent in November 2024, showing a significant rebound in economic activity within the hospital subsector. This marks the 15th consecutive month of growth, following two months of contraction earlier in the year. The increase of 6.6 percentage points from the previous month's reading of 51.9 percent highlights the sector's resilience and ability to navigate recent challenges.
Nancy LeMaster, who chairs the ISM Hospital Business Survey Committee, noted that several key indices saw improvements that illustrate a robust recovery. The Business Activity Index, which reflects the volume of activity in the sector, shifted back into expansion territory after contracting for the first time in 15 months in October. This positive shift is supported by the New Orders Index, which also returned to growth after a brief decline.
One notable area of concern identified in the report was the ongoing challenge with IV fluid shortages. These shortages have reportedly caused some elective surgeries to be postponed. However, compared to the previous month, the situation seems to have improved, as conservation efforts and an increase in imported fluids have led to a resurgence in volumes for most healthcare organizations. The demand in hospitals remains strong, indicating an uptick in patient volumes, which has positively impacted employment levels, albeit with some facilities implementing full-time employee reduction initiatives to enhance operational margins.
LeMaster expressed optimism regarding the future of the hospital sector, stating that the anticipated strong volume of activity is expected to continue towards the end of the year. Many panelists reflected positive sentiments about the recovery trajectory, indicating a collective resilience in adapting to supply chain disruptions, weather-related delays, and backlogs caused by the East Coast ports strike.
In terms of specific indices, the Supplier Deliveries Index has shown a continued trend in expansion, albeit indicating slower delivery performance. The Days Payable Outstanding Index also returned to an expansion mode, indicating that hospitals are managing their payment obligations more effectively, increasing from 45.5 percent in October to 54 percent in November.
Despite the challenges, the report's overall findings paint a picture of a recovering sector that is adapting and making the necessary adjustments to meet patient needs and regulatory demands. The Hospital PMI® serves as a crucial barometer for hospital supply executives, helping to guide strategic decisions based on current market conditions.
The data reflects a composite index that aggregates the responses of hospital purchasing and supply executives, drawing from their insights on various indicators including business activity, new orders, employment, and supplier deliveries. Updated monthly, this report is instrumental for stakeholders looking to understand and navigate the complexities of the hospital supply chain industry, offering a pulse on economic health and operational efficiencies.
As we move into 2025, the healthcare sector remains a pivotal focus of economic analysis, with continued attention on how hospitals manage resources and adapt to fluctuating demands. The next Hospital ISM® Report On Business® will provide further insights as we analyze December data and project into the new year. The ongoing recovery suggests a shift towards long-term improvements and strategic developments essential for the sustainable growth of hospitals across the nation.
Nancy LeMaster, who chairs the ISM Hospital Business Survey Committee, noted that several key indices saw improvements that illustrate a robust recovery. The Business Activity Index, which reflects the volume of activity in the sector, shifted back into expansion territory after contracting for the first time in 15 months in October. This positive shift is supported by the New Orders Index, which also returned to growth after a brief decline.
One notable area of concern identified in the report was the ongoing challenge with IV fluid shortages. These shortages have reportedly caused some elective surgeries to be postponed. However, compared to the previous month, the situation seems to have improved, as conservation efforts and an increase in imported fluids have led to a resurgence in volumes for most healthcare organizations. The demand in hospitals remains strong, indicating an uptick in patient volumes, which has positively impacted employment levels, albeit with some facilities implementing full-time employee reduction initiatives to enhance operational margins.
LeMaster expressed optimism regarding the future of the hospital sector, stating that the anticipated strong volume of activity is expected to continue towards the end of the year. Many panelists reflected positive sentiments about the recovery trajectory, indicating a collective resilience in adapting to supply chain disruptions, weather-related delays, and backlogs caused by the East Coast ports strike.
In terms of specific indices, the Supplier Deliveries Index has shown a continued trend in expansion, albeit indicating slower delivery performance. The Days Payable Outstanding Index also returned to an expansion mode, indicating that hospitals are managing their payment obligations more effectively, increasing from 45.5 percent in October to 54 percent in November.
Despite the challenges, the report's overall findings paint a picture of a recovering sector that is adapting and making the necessary adjustments to meet patient needs and regulatory demands. The Hospital PMI® serves as a crucial barometer for hospital supply executives, helping to guide strategic decisions based on current market conditions.
The data reflects a composite index that aggregates the responses of hospital purchasing and supply executives, drawing from their insights on various indicators including business activity, new orders, employment, and supplier deliveries. Updated monthly, this report is instrumental for stakeholders looking to understand and navigate the complexities of the hospital supply chain industry, offering a pulse on economic health and operational efficiencies.
As we move into 2025, the healthcare sector remains a pivotal focus of economic analysis, with continued attention on how hospitals manage resources and adapt to fluctuating demands. The next Hospital ISM® Report On Business® will provide further insights as we analyze December data and project into the new year. The ongoing recovery suggests a shift towards long-term improvements and strategic developments essential for the sustainable growth of hospitals across the nation.
Topics Health）
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