Credit Managers’ Index Slides
Tuesday, May 30, 2017
In May, the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) dropped to its lowest level since November 2016. The overall index stands at 53.6, compared to 55.8 last month. The index of favorable factors dropped from 63.6 in April to 60.0, and the index of unfavorable factors declined from 50.6 to 49.3.
“The wild enthusiasm that was noted at the start of the year has faded as reality sets in,” said NACM Economist Chris Kuehl, Ph.D. “There will be few swift changes or victories as far as the economy is concerned. Tax reform, infrastructure build, deregulation and all the rest will be slow to appear, and it is not clear that business and consumer will have sufficient patience.”
The favorable subcategories all slipped a little, and most fell out of the 60s. Sales slipped from 63.8 to 60.6. New credit applications dropped from from 62.0 to 59.3. The dollar collections category showed dipped from 61.2 to 56.7, giving up nearly the entire gain from April.
Even worse news can be found in the unfavorable subcategories. Accounts placed for collection dropped slightly from 49.0 to 48.5, extending its longtime sub-50 trend. The disputes reading took a big hit, moving from 49.1 to 47.9. Dollar amount beyond terms collapsed from 51.0 to 45.9. The dollar amount of customer deductions fell as well, going from 49.2 to 48.7. The filings for bankruptcies category dipped from 53.5 to 52.7.
“The sense right now is that companies are less upbeat than they were earlier in the year,” Kuehl said. “The big growth opportunities have not materialized as yet, but there remains some hope they will. The other measures of the economy have been showing some of this angst as well, as the Purchasing Managers’ Index has been down from previous heights and the latest durable goods numbers were a little off their recent peak.”
View the complete report and analysis from NACM.
Forius members are encouraged to participate in the monthly CMI survey. Taking just five minutes to respond helps ensure the index remains a valuable tool for the association and your profession. Learn more.