Credit Managers’ Index Declines
Wednesday, July 31, 2019
The July Credit Managers’ Index declined again in July. Data from the National Association of Credit Management (NACM) shows the overall index dropping to 53.4 from 55 last month. Both the index of favorable factors and unfavorable factors decreased as well.
“Here we are at the mid-point of the year, and the data still points to a decent growth rate for the U.S. economy,” said NACM Economist Chris Kuehl, Ph.D. “The worrisome part is that some of the more reliable future indicators, including the CMI, are starting to falter.”
Looking at the favorable factor subcategories, sales slipped from 60.4 to 58.4, nearly reaching this year’s low point of 58.2 in March. New credit applications dropped from 62.4 to 60.8. The dollar collections tumbled from 60.3 to 56.6, matching its 2019 low point from March. Amount of credit extended dropped below 60 for the first time in over a year, moving from 62.5 to 58.7.
The unfavorable factor subcategories provided mixed results. Rejections of credit applications increased slightly from 52.4 to 52.6.Accounts placed for collection plunged deep into sub-50 contraction territory, from 50 to 46.2. The disputes category improved, sliding up from 48.6 to 50.5. Dollar amount beyond terms dropped to 46.1 from 49.8 last month. The dollar amount of customer deductions category gained slightly, moving from 50 to 51.2. The filings for bankruptcies held fairly steady with a reading of 53.2, down from 53.5.
“The issues that have contributed to more accounts out for collection and reduced dollar collection have not become serious enough to boost the bankruptcy numbers,” Kuehl said. “What is of some concern is many of the bankruptcies are taking place with larger companies and they have tended to come in the retail sector as well as in industries that rely heavily on global trade – import side or export side.”
View the complete report and analysis from NACM.
NACM North Central 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.