July CMI Signals Possible Trouble Ahead
Tuesday, July 31, 2018
The National Association of Credit Management Credit Managers’ Index (CMI) for July reflects an overall drop in both the service and manufacturing sectors, setting the CMI back to a point that has not been this low since January of this year.
While the current economic environment has boasted a speedy quarterly growth of 4.1 percent, an unemployment rate between 3.8 percent and 4 percent, and an expansion of exports, this growth likely won’t continue—and this month’s drop in the CMI reflects this eventual fallout, according to NACM Economist Chris Kuehl, Ph. D. With the sales category falling dramatically in both sectors, trouble may be imminent.
“The fear now is that some of the factors that had been keeping the economy functioning reasonably well are starting to fade,” Kuehl writes in the CMI report, which will be available later this week.
On the more positive end of the spectrum, this month’s CMI shows bankruptcies improving in both sectors, along with rejections of credit applications also improving.