NACM’s Credit Managers’ Index Drops Nearly Two Points in August

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August’s economic report from the National Association of Credit Management sharply dropped from 56.0 to 54.2.

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That sick feeling that one gets on a roller coaster seems to be affecting those that have been following the gyrations of the CMI this year.

The positive beacon of light in July was extinguished this month as the August report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) showed a nearly two-point drop in the combined score—slipping from 56.0 to 54.2.

Although the drop is notable, the reading was lower in June and about the same in May, said NACM Economist Chris Kuehl, Ph.D. Readings in March and April “were in the 53-range so compared to this, the current reading is not so bad. The breakdown of the various categories sheds a little light on what seems to be going on in the credit world and by extension the rest of the world.”

Going from 63.5 to 59.2, favorable factors were the main drag. The biggest shift occurred in the sales category and smaller declines were recorded in new credit applications, dollar collections and amount of credit extended. While unfavorable factors increased slightly from 50.8 to 51.0, the categories of rejection of credit applications, disputes, and filings for bankruptcies declined. Small increases, however, were noted in the categories of accounts placed for collection, dollar amount beyond terms and dollar amount of customer deductions.

“That sick feeling that one gets on a roller coaster seems to be affecting those that have been following the gyrations of the CMI this year,” Kuehl said. “A good month seems to occur after a bad one and then there is a return to the negative side of the next one.”

For a full breakdown of the manufacturing and service sector data and graphics, view the complete August 2015 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.

ABOUT THE NATIONAL ASSOCIATION OF CREDIT MANAGEMENT
NACM, headquartered in Columbia, Maryland, 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.

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Jennifer Lehman
National Association of Credit Management
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