Showing a modest increase, January’s economic report from the National Association of Credit Management has encouraging news for credit professionals.
Despite market volatility, economic indicators such as the January report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) can be added to the other lists of data sources such as housing, employment and manufacturing that have been pointing in a positive direction, according to NACM Economist Chris Kuehl, Ph.D.
A combined reading of 53.5 up from December’s 52.8, “puts the numbers back to what they were in October of last year … the trend is certainly in the right direction of late,” Kuehl explained.The favorable categories gained just over 1.5 points, while the unfavorable categories remained even at 50.3. Kuehl noted that, “The data on the unfavorable categories are not as encouraging, but at least the big declines seem to have come to an end for now. Those under 50 are now at four and last month only three dipped into the contraction zone showing that there are still many companies in some economic distress.”
“In general, the CMI report [for manufacturing] is more upbeat than has been the case in the recent past,” said Kuehl. However, as regards a two-point drop in the rejections of credit applications, “There are companies that are in trouble right now and seek someone to throw them a lifeline by offering credit when that would likely be a bad idea. Many of the companies are not offering that credit rescue these days and thus reject a lot of the applications that are coming in.” Like manufacturing, the service sector had a modest upward trend with the favorable factors breaking the 60 barrier.
For a full breakdown of the manufacturing and service sector data and graphics, view the complete January 2016 report at http://web.nacm.org/pdfs/CMIcurrent.pdf. CMI archives may also be viewed on NACM’s website at http://www.nacm.org/cmi/cmi-archive.html.
NACM, headquartered in Columbia, MD, supports more than 15,000 business credit and financial professionals worldwide with premier industry services, tools and information. NACM and its network of affiliated associations are the leading resource for credit and financial management information, education, products and services designed to improve the management of business credit and accounts receivable. NACM’s collective voice has influenced federal legislative policy results concerning commercial business and trade credit to our nation’s policy makers for more than 100 years, and continues to play an active part in legislative issues pertaining to business credit and corporate bankruptcy. NACM's annual Credit Congress & Exposition conference is the largest gathering of credit professionals in the world.