With no change in the combined totals from last month, February’s economic report from the National Association of Credit Management shows offsetting positive and negative trends in the sub-categories.

The question for credit managers, according to the February report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM), is whether the positive trends in the sub-categories will be strong enough to pull the data forward in the weaker categories indicating an easing of credit or more challenges ahead.

“In some respects, this [unchanged numbers for some factors and volatile trends for others] seems to reflect the economy as a whole,” said NACM Economist Chris Kuehl, Ph.D. “There has been similar activity in some of the other indices that are watched carefully for trend signals. The Purchasing Managers’ Index is back down in the 40s and that is worrisome, but at the same time, there has been a gain in the New Orders Index and that suggests that future readings could be stronger.”

With a slight improvement from 58.2 to 58.6 in the index of favorable factors and a less encouraging trend in the unfavorable categories (50.3 to 50.1), the total combined score was 53.5, the same as January. All four favorable sub-categories showed increases with sales leading the pack (55.8 to 56.8) and dollar collections coming in second at 58.3 up from 57.8.

In the combined unfavorable categories, four of the six factors are in the contraction zone (below 50), the same ones as last month. Disputes had the only gain, moving from 48.6 to 49.7, while rejections of credit applications and dollar amount of customer deductions remained unchanged at 52.2 and 49.5, respectively.

“The good news is that there is a marked difference in the performance of the favorable factors as all of them are in expansion territory and one of the readings is above 60 (amount of credit extended),” explained Kuehl. “The decline of the unfavorable numbers suggests more and more companies are facing struggles to keep current on their debt. Thus far, the challenges are not unexpected with the companies engaged in the oil sector having the hardest time of it.”

For a full breakdown of the manufacturing and service sector data and graphics, view the complete February 2016 report at http://web.nacm.org/CMI/PDF/CMIcurrent.pdf. CMI archives may also be viewed on NACM’s website at http://www.nacm.org/cmi/cmi-archive.html.