SSR Index of Current-Quarter Demand Growth; Raising Estimate to 3.3% from 3.1%


Hours worked in healthcare settings have grown more rapidly; this signals strong patient volumes, thus the increase in our estimate of unit demand from 1.4% to 1.6%. Our estimate of nominal pricing is unchanged at 1.7%

We estimate only a 7% likelihood (down from 11%) of 2Q12 demand growth falling below the y/y rate measured in 1Q12

We expect the cyclical recovery in healthcare demand to continue through 2Q12 despite weak May (whole economy) jobs data, in large part because of the lag between hiring and growth in healthcare demand. This said, we recognize job growth must continue at rates above the May levels for healthcare demand to continue its cyclical recovery in the back half of 2012

We continue to recommend a pro-US / pro-cyclical tilt; our favorite subsectors are Hospitals, Non-Rx Consumables, and Commercial HMOs

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