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

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.”

NACM’s Credit Managers’ Index Shows Incremental Growth in May

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May’s economic report from the National Association of Credit Management shows slight growth, with the combined index increasing from 53.9 last month to 54.1.   

The May report of the  Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) reflected a small increase this month. May’s combined index is back to 54.1, the same reading as recorded in February. While the reading is certainly respectable, most of last year saw a higher combined score—in the 56 range.

“The word of the day seems to be ‘incremental,’” said NACM Economist Chris Kuehl, Ph.D. “There are still signs of growth and some stability. The problem is that there was an expectation of more by this time.”

The CMI index of favorable factors declined from 59.8 in April to 58.8 this month, and the index of unfavorable factors are at 50.9— just above the contraction zone. The good news, however, is the overall index is not as low as the 53.4 reading posted in March. The biggest drop this month in the combined sectors came in the sales category, slipping from 59.1 to 57.1—the lowest it has been in the last two years. “This suggests that there remains a lot of caution among consumers and business buyers alike—something that has been reinforced by the durable goods data of late,” said Kuehl.

NACM Spotlights Improving Business Culture

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The National Association of Credit Management (NACM) kicked off the first full day of its 119th annual Credit Congress on Monday in St. Louis. The opening General Session focused on making positive changes within the organization--and therefore, the entire B2B credit industry--and improving NACM member resources, including the National Trade Credit Report and eNews, as well as its ongoing lobbying work regarding federal bankruptcy reform.

Keynote Speaker Jim Knight, author of "Culture That Rocks," told the session comprised of more than 1,000 trade credit and financial professionals that a company's culture shapes so much of their performance now and in the future. "Celebrate heritage, but focus on culture," Knight advised, adding that culture focuses on today's behaviors, not yesterday's habits.
Knight, who spent a majority of his career working for Hard Rock International, played heavily on music analogies explaining that everyone in a band "needs to sing off the same sheet of music" and has an important role. "We need rock stars (not lip-synchers) to amp up the band," he said. Managers need to work hard to create an atmosphere that makes people never want to go on another job interview, or perhaps, in extreme cases, even get a tattoo of the company logo on their body--a move that would show true dedication, Knight quipped.

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