News: NACM News

Credit Managers’ Index Dips Slightly

Thursday, March 29, 2018  
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After two consecutive positive month, the Credit Managers’ Index declined slightly in March. Data from the National Association of Credit Management (NACM) shows the overall index moving from 56.5 to 55.6.

“The efforts that have been made regarding tax cuts and government spending should have been manifesting, but many sectors are simply treading water,” said NACM Economist Chris Kuehl, Ph.D. “Retail is not surging despite hikes in consumer confidence; it appears that potential trade issues have been taking their toll as well.”

The index of favorable factors showed a moderate decrease but still maintains a respectable position in the 60s. Last month’s reading of 64.9 dipped to 63.2 in March.  The unfavorable factors declined at an even smaller rate, moving from 50.9 to 50.6.

Looking into the favorable factor subcategories, sales slipped from 66.8 to 64.1. New credit applications declined from 63.3 to 62.7. The dollar collections category dropped from 62.9 to 59.6. Amount of credit extended held relatively stable, moving 66.4 to 66.2.

“There is still a lot of credit being offered—especially to some of the larger customers,” Kuehl said.

The unfavorable subcategory numbers weren’t as dramatic as those affecting the favorable factors. Rejections of credit applications improved slightly from 51.5 to 53.3. Accounts placed for collection also saw a slight increase from 49.8 to 50.4, returning to the expansion zone. The disputes category remained in contraction, dropping from 49.6 to 47.7. Dollar amount beyond terms also retreated after February’s increase, dipping from 49.9 to 47.2. The dollar amount of customer deductions category saw a slight gain from 49.1 to 49.8. The filings for bankruptcies returned to its January level of 55.2 after risking to 55.4 in February.  

“The good news is that the numbers are respectable and even robust when looking just at the favorable factors,” Kuehl said. “There are reasons for caution, but few reasons for any sort of panic. It has been more a matter of disappointment that things are not better than this after all the changes at the start of the year.”  

View the complete report and analysis from NACM.

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