A survey of 61 hospital administrators indicates that capital spending in 2009 won’t be nearly as constrained as originally projected, a sign that the pressure on the medical technology industry may be subsiding a bit.
The MEDACorp quarterly survey of hospital administrators by Leerink Swann, a New York investment bank, projected a 4 percent decline in capital spending compared to last year. That’s a significant reduction from the double-digit cutbacks administrators were predicting back in April and July, of 14 percent and 13 percent, respectively.
The administrators also reported that fewer hospitals are anticipating a reduction in procedure volume for orthopedic and general surgeries, leading Leerink analysts to posit that “the hospital environment may be stabilizing and that the worst of the recession may be behind for MedTech, at lease on the procedure and capital spending fronts.”
That may bode well for Stryker Corp., which will release its Q3 earnings Oct. 20. The Kalamazoo, Mich.-based medical device maker has taken it on the chin so far in 2009, posting a double-digit decline in revenue last quarter and a nearly 5 percent hit to its bottom line, thanks to constrained hospital budgets. Stryker houses its Stryker Biotech division in Hopkinton, Mass.
The survey’s other positive findings include a report that 47 percent of the respondents said they didn’t expect a delay in purchasing capital equipment in 2009. But most respondents said they didn’t expect 2010 budgets to be higher than they were in 2009.
The survey was compiled using data from a survey of 61 administrators at mostly non-profit, community hospitals in the United States.
A full copy of the survey can downloaded below.