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Media Contact: Caroline Zimmerman, Editorial Director, 410-740-5560, carolinez@nacm.org

NACM’s Credit Managers’ Index for October Returns to Prior Levels, Sits at 62.6

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October report from the National Association of Credit Management dismisses September's poor performance. Readings for deductions, disputes and past due accounts climb out of contraction, enforcing the notion of resilience in the economy.

Columbia, MD: October 31, 2014—The October report of the Credit Managers' Index (CMI) from the National Association of Credit Management returned to a respectable status, jumping more than two points from 54.9 to 57.0. The readings are back to highs seen at the start of the year. The index of favorable factors cleared 60 comfortably and now sits at 62.6, which is still off the pace set in July and August, but is trending in the right direction again. The fall of the index of unfavorable factors to 50.9 last month was concerning as it was the lowest point reached in almost two years, but its impressive gain this month to 53.2 reaches back to March readings. This means that the concerns about the state of creditors have eased a little.

National Association of Credit Management to Host Live Webinar on How Tech Data Achieved a 120%+ Efficiency Improvement on Credit Reviews with Automation in SAP

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Join NACM and HighRadius to learn how Tech Data leveraged innovative technology to automate the retrieval of credit information from credit and trade groups.

Columbia, MD; October 15, 2014—The National Association for Credit Management (NACM), a leading resource for credit and financial management information and education, and HighRadius Corporation, a leading provider of financial supply chain management (FSCM) solutions, are proud to announce a complimentary webinar on October 16 with Tech Data on "How Tech Data Achieved a 120%+ Efficiency Improvement on Credit Reviews with Automation in SAP."

The webinar will offer expert advice from Mary Ann Blackmore, senior manager of credit at Tech Data Corporation, Michelle Herman, business development at NACM, and Jay Tchakarov, director of product management at HighRadius. Registrants will learn how Tech Data leveraged innovative technology to automate the retrieval of credit information from credit and trade groups and used it to drive credit reviews in order to maximize team member efficiency and focus on high-value activities.

This informative webinar will specifically cover how Tech Data was able to:

  • Automate credit report retrieval to eliminate manual tasks
  • Setup a fully integrated and automated credit scoring and prioritization mechanism to identify highest risk accounts
  • Save money by transitioning segments of international business away from credit insurance
  • Re-allocate resources to higher value-added activities
  • Enable growth without growing their department team

NACM’s Credit Managers’ Index for September Plunges to 54.9

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Reasons behind the large declines in the September report from the National Association of Credit Management are not easily determined. The month may be just another anomaly, or a far more consequential indication of an end to the recent period of economic growth.

Columbia, MD: September30, 2014—The September report of the Credit Managers' Index (CMI) from the National Association of Credit Management fell to 54.9 from 56.7. While still firmly in the growth category, this is the lowest reading in nearly two years. Not even the Polar Vortex months were this weak and the collapse was felt in a variety of categories. This was not a good month and that brings a great many concerns to the forefront.

"This was not a small reversal of fortune by any stretch of the imagination," said NACM Economist Chris Kuehl, PhD. "This could be termed a collapse, and it begs a very important question. Which is correct: the Purchasing Managers' Index or the Credit Managers' Index?" In past years, it has been noted that the CMI tends to predict the pattern that will be seen in the PMI in the next month or two. "If that assessment continues to be accurate, the economy as a whole may be in for a very rude awakening," Kuehl said. "The numbers this month are almost shocking and there will be intense interest in what the index reports in the next iteration as this will determine whether this is the start of a depressing trend or just one of those anomalous months. The one factor that may provide some hope is that August and September are often difficult to get an accurate read on given the vagaries of the summer break and the return to school."

NACM’s Credit Managers’ Index for August Remains at 56.8

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Credit consistency in the August economic report from the National Association of Credit Management provides reason to be optimistic about conditions for the rest of the year and should help quell fears of inflation.

Columbia, MD: August 29, 2014—Consistency is generally a positive development when the overall readings have been positive and this is the case for the August report of the Credit Managers’ Index (CMI) from the National Association of Credit Management, which posted no change from July’s 56.8. This marks five months of readings between 56 and 56.8 and given the volatility in the economy as a whole for this period, this stability in credit is a positive signal as far as the rest of the year is concerned.

“The August CMI reflects a more optimistic future, but not an economy that is likely to surge,” said NACM Economist Chris Kuehl, PhD. “In comparing this month’s reading to that reported by the Federal Reserve, it is easier to understand the optimism about the last half of the year, as well as the worry about the impact of inflation fueled by some of this growth.” Nearly all the index’s readings reflect that same stability, though there was noteworthy movement in both the favorable and unfavorable factor indices. Kuehl noted the same stability in various important data streams—capacity utilization between 78% and 79.7% over this period—just a little shy of what is considered normal. Stability also appears in terms of capital expenditure. “These measures stand in stark contrast to the wild gyrations in the overall growth rate as first quarter numbers were in recession territory at -2.1%, while the second quarter boasted a gain of over 4%,” Kuehl said.

NACM’s Credit Managers’ Index for July Reflects Improved Confidence, Rises to 56.8

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Columbia, Maryland: July 31, 2014—The Credit Managers' Index (CMI) from the National Association of Credit Management (NACM) improved to 56.8 from 56.1 in July. The readings for the favorable and unfavorable factor indices improved, from 62.4 to 63.7 for the favorable factor index, marking the highest point in over four years, and from 52.0 to 52.2 for the unfavorable factor index. The latter being below marks set earlier in the year, but is at least trending in the preferred direction.

"The overall sense is that real progress in economic recovery is being made and the future looks brighter," said NACM Economist Chris Kuehl, PhD about the July CMI report. "But, not to rain on the parade, these numbers also looked good at the start of the year, and it has taken until mid-summer to regain that momentum." Winter weather was partly responsible for this struggle, as was the significant decline in exports of American goods, Kuehl noted. "The rebound in exports played a major role in getting the US back to growth, but the caution is that many of those importing nations are still not in very good economic shape," he said.

Significant readings within the favorable factors promise better days ahead. Sales improved from 63.9 to 65.2, back to the level set in May. "The sales reading has been strong for some months and that bodes well as sales will underpin any kind of real progress in the months to come," Kuehl said. New credit applications improved from 61.5 to 62.4, the second straight month above 60 and at a yearly high. Dollar collections got back on track and crested above 60 again, moving from 59.3 to 61.0. Finally, amount of credit extended jumped dramatically from 64.8 to 66.1. "This is the highest reading since the recession and suggests far more credit access than before," Kuehl said. "This tracks with the data that comes from the Federal Reserve on bank lending in general and that is very solid news for the economy as a whole."

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