Credit Managers’ Index Disappoints in September
Monday, September 30, 2019
The Credit Managers’ Index declined again in September. Data from the National Association of Credit Management (NACM) shows the overall index dropping to 54.1 from 55.2 last month. Both the index of favorable factors and unfavorable factors decreased as well.
“Last month featured a nice little rebound in the Credit Managers’ Index (CMI)—especially on the manufacturing side,” said Chris Kuehl, NACM Economist. “That gain was short-lived as this month there was a bit of a decline. The data is still pretty firmly in the expansion zone (above 50) but not as robustly as was the case earlier.”
Looking at the favorable factor subcategories, sales took a significant slide from 64.4 to 58.7. New credit applications dropped from 60.9 to 59.7. The dollar collections declined from 60 to 58.5, matching its 2019 low point from March. Amount of credit extended dropped below 60 for the second time in over a year, moving from 61.7 to 59.7.
The unfavorable factor subcategories didn’t change much from the previous month. Rejections of credit applications slipped slightly from 52.1 to 51.4. Accounts placed for collection held relatively steady, at 48.4 from 48.6. The disputes category improved, easing up from 49.4 to 50. Dollar amount beyond terms slid to 50.2 from 53.6, staying out of contraction territory. The dollar amount of customer deductions category gained slightly, moving from 50 to 52.1. The filings for bankruptcies also improved from 51.6 to 52.1.
“The data this month was slightly less impressive than last month, but the declines were not steep, The exception was that sales numbers tanked, and that worries analysts down the road,” Kuehl said. “A reading in the upper 50s is certainly no cause for alarm, but the trend is not good and signals there may be more caution in the economy—an observation that has been made by many looking at other data points.”
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