Magazine article Business Credit

CREDIT MANAGERS' INDEX: NACM's Credit Managers' Index Continues to Weaken

Magazine article Business Credit

CREDIT MANAGERS' INDEX: NACM's Credit Managers' Index Continues to Weaken

Article excerpt

There is no way to sugarcoat it: Credit professionals' economic outlook as measured by NACM's Credit Managers' Index (CMI) has sunk to its lowest point since October 2009.

The CMI's combined index for August remained in expansion territory (anything above 50), but the decline from 53.5 to 52 is the biggest one-month fall since September 2014. The favorable factors categories collectively erased losses throughout 2016 of its unfavorable factors counterparts, which were stabilized in August, but they have now deteoriated sharply in both the manufacturing and service sectors.

The collapse in sales in the August CMI is consistent with other data and comes at a bad time for an already struggling retail community, said NACM Economist Chris Kuehl, Ph.D. He also highlighted the importance of a newfound slump in amount of credit extended because it "reflects credit issuance to larger clients and customers, as they are the ones that will be seeking the most."

Even what appears to be bright spots, such as improvement in the unfavorable factors category of rejection of credit applications, should not be overstated this month given deteriorating credit demand. …

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