Credit Managers’ Index Takes Another Dip
Friday, July 28, 2017
Following June’s rebound, the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) dropped again in July, continuing this year’s familiar up-and-down trend for the index. The overall index stands at 54.6, compared to 56.1 last month.
“The fact is that much of the country’s economic data has been like this for the past few months with lots of contradictions,” said NACM Economist Chris Kuehl, Ph.D. “The CMI has been right in there with data that shifts from upbeat to downbeat as one month yields to another.”
The index of favorable factors also declined from 63.9 in June to 61.7, and the index of unfavorable factors returned to the sub-50 contraction zone, moving from 50.9 to 49.9.
The favorable subcategory activity varied. Sales slipped from 66.5 to 62.8. New credit applications remained relatively stable, inching lower from 59.8 to 59.7. The dollar collections category shifted slightly from 62.5 to 60.2. Amount of credit extended dropped from 66.8 to 64.1.
Movement in the unfavorable subcategories varied more than the favorable subcategories. Rejections of credit applications remained above contraction but dipped from 52.6 to 51.9. Accounts placed for collection remained in contraction, dropping from 49.3 to 48.9. The disputes reading, which climbed out of contraction in June, returned to its sub-50 level, coming in this month at 48.8. Dollar amount beyond terms also sank back into contraction, moving from 50.4 to 48.3. The dollar amount of customer deductions declined from 49.1 to 48.1. The filings for bankruptcies category showed a slight improvement, edging up from 53.4 to 53.6.
“It looks like companies are catching up with their creditors one month and falling back the next,” Kuehl said. “This is another month where they are losing ground.”
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