Hospital PMI® at 55%; April 2025 Hospital ISM® Report On Business®

TEMPE, Ariz., May 7, 2025 /PRNewswire/ -- Economic activity in the hospital subsector grew in April for the 20th 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 55 percent in April, a 4-percentage point increase from the March reading of 51 percent. The Business Activity Index remained in expansion territory for the sixth straight month. The New Orders Index expanded for the sixth consecutive month, and the Employment Index returned to expansion territory in April after two straight months in contraction. The Supplier Deliveries Index returned to expansion (which indicates slower delivery performance) after contracting in the previous month. The Case Mix Index returned to contraction territory in April, registering 49.5 percent, a decrease of 5 percentage points from the reading of 54.5 percent reported in March. The Days Payable Outstanding Index remained in contraction in April, registering 49 percent, up 1.5 percentage points from the 47.5 percent reported in March. The Technology Spend Index reading of 56.5 percent is an increase of 1.5 percentage points compared to the 55 percent recorded in March. The Touchless Orders Index returned to contraction territory in April, registering 49.5 percent, down 2.5 percentage points from the reading of 52 percent reported in March."

LeMaster continues, "Hospital Business Survey panelists, collectively, cited mixed results in April. Some respondents reported that elective surgical cases increased across some systems, leading to decreases in inventory levels, supplementing deliberate efforts at inventory reduction. Other hospital systems reported increased patient volumes due to seasonal illnesses, as well as expanded services that enabled increased focus on physician recruitment retention efforts. Regarding tariffs and potential impacts, there were some expectations that costs will increase significantly during the second quarter of 2025, particularly among IT-related items. This is a problem for providers, since many do not have the ability to raise prices to maintain margins. Some organizations have increased bulk buys in advance of tariffs; others have shifted, where possible, major category business to U.S. manufacturers. In some cases, panelists reported that their facilities are getting too many substitutions for out-of-stock items from distributors."

About This Report
The information compiled in this report is for the month of April 2025.

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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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 around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the strategy and practice of integrated, end-to-end supply chain management through leading edge data-driven resources, community, and education to empower individuals, create organizational value and to drive competitive advantage. ISM's vision is to foster a prosperous, 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 May 2025 data will be released at 10:00 a.m. ET on Friday, June 6, 2025.

*Unless the New York Stock Exchange is closed.

SOURCE Institute for Supply Management