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Media Contact: Diana Mota, Associate Editor, 410-740-5560, dianam@nacm.org

NACM’s Credit Managers’ Index Reflects Improvement in Manufacturing and Service Sectors

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 October’s economic report from the National Association of Credit Management took a positive turn from last month’s reading of 52.9, increasing to 53.9.

Emerging from the downward trend of the last two months, the October report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) showed improvement in the manufacturing and service sectors. Within a month, the combined index gained a full point, rising from 52.3 to 53.9. Still, only time will tell whether it is a glimmer of hope or simply a mirage, cautioned NACM Economist Chris Kuehl, Ph.D.  

"The readings this month have been a vast improvement over the readings of the previous two months, and that is certainly welcome news in a period when the bulk of the data has been trending in a negative direction," said Kuehl, noting the recent weakness in durable goods orders and new homes market, as well as the strength of the dollar and its impact on exports.

The index of favorable factors posted the most significant improvement, increasing from 57.7 in September to 59.4 in October. All four categories within this index rose from the previous month. The index of unfavorable factors also reflected similar improvements, rising from last month's 49.7 to 50.2; it showed increases in its six subcategories as the overall unfavorable group returned to expansion levels. The categories of disputes and dollar amount beyond terms, however, remain in contraction territory.

NACM's Credit Manager's Index Continues Decline in September

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September’s economic report from the National Association of Credit Management dropped even further from the previous month’s reading of 54.2 to 52.9.

Columbia, MD: September 30, 2015—Breaking away from the roller coaster ride seen over the last few months, the September report of theCredit Managers’ Index (CMI) from the National Association of Credit Management (NACM) continued to decline, resulting in the lowest combined index of the last year.

The index of unfavorable factors was mostly to blame for the overall drop with four of the six categories falling below the 50.0 contraction zone. “When the unfavorable factors are showing stress, it is an indication that companies are feeling the pinch and may be starting a long downward trend,” said NACM Economist Chris Kuehl, Ph.D.

The index of favorable factors did not do too well either with three of the four categories dropping from the previous month—although, all remained above contraction territory. The category of new credit applications showed the only increase, from 57.7 to 58.1, which Kuehl described as an “interesting sign,” while also acknowledging it is the third lowest reading within that category in the last 12 months. “Nearly all the readings are down from where they were a month ago and significantly down from a year ago,” Kuehl said. “There will have to be a big rebound just to get back to where the readings were in October and November of 2014.”

NACM’s Credit Managers’ Index Drops Nearly Two Points in August

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August’s economic report from the National Association of Credit Management sharply dropped from 56.0 to 54.2. 

Columbia, MD: August 31, 2015—The positive beacon of light in July was extinguished this month as the August report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) showed a nearly two-point drop in the combined score—slipping from 56.0 to 54.2.

Although the drop is notable, the reading was lower in June and about the same in May, said NACM Economist Chris Kuehl, Ph.D. Readings in March and April “were in the 53-range so compared to this, the current reading is not so bad. The breakdown of the various categories sheds a little light on what seems to be going on in the credit world and by extension the rest of the world.”

Going from 63.5 to 59.2, favorable factors were the main drag. The biggest shift occurred in the sales category and smaller declines were recorded in new credit applications, dollar collections and amount of credit extended. While unfavorable factors increased slightly from 50.8 to 51.0, the categories of rejection of credit applications, disputes, and filings for bankruptcies declined. Small increases, however, were noted in the categories of accounts placed for collection, dollar amount beyond terms and dollar amount of customer deductions.

NACM’s Credit Managers’ Index Showing a Positive Recovery

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July’s economic report from the National Association of Credit Management gives an optimistic outlook, with the combined index rising from 53.4 to 56.  

Columbia, MD: July 31, 2015—The July report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) reflected a positive recovery to 56—higher than any monthly reading since last October.

“Think about that for a moment—[that’s] as high as it was when the GDP numbers for the country were trending at close to 5% growth,” said NACM Economist Chris Kuehl, Ph.D. “This is a pretty stunning turnaround.”

The driving force behind the combined index’s higher reading comes from the index of favorable factors, which improved from 59.6 in June to 63.5 in July. The combined sales category, however, showed the most impressive gain, jumping from 56.6 to 65.1. Durable goods orders as well as the Purchasing Mangers’ Index have seen similar upward movements, Kuehl added.

NACM’s Credit Managers’ Index Again Fails to Build Positive Momentum in June

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June’s economic report from the National Association of Credit Management finds yet another reversal of fortune, with the combined index sliding to 53.4 from 54.1.  

The June report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) fell back to 53.4, mirroring the slide found from February to March. The ongoing inconsistency makes the CMI, among other economic data, most resemble a seesaw, according to NACM Economist Chris Kuehl, Ph.D.

“Every month, analysts await new set of data releases poised to make some declarative statement regarding where the economy is heading—every month, the clear path proves to be elusive once again,” said NACM Economist Chris Kuehl, Ph.D. “There always seems to be something both optimists and pessimists can latch on to.”

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