June CMI Blip Shouldn’t Discourage Credit Managers
(PRWEB) July 02, 2018 -- The April irregularity in NACM’s Credit Managers’ Index (CMI) seems to be a thing of the past after the June report showed continued stability in the market. Following a large, vertical ascent in May, this month’s CMI only fell back slightly. Coming in with a combined CMI score of 56.3, this is the first time in almost four years the index has stayed above 56 in consecutive months.
“There was some variability but not really enough to push the needle one way or the other,” said NACM Economist Chris Kuehl, Ph.D. “This is pretty consistent with many of the other measures that have been employed to gauge the state of the economy at the moment.”
Within the combined favorables, new credit applications had the largest step back at more than three points behind May’s reading. The favorable factors index was saved, however, due to a modest jump in dollar collections—a 12-month high—and a constant sales factor. Even with the decline, favorables remained in the 60s for the sixth straight month.
Combined unfavorables showed some promise, with accounts placed for collection improving back into expansion territory (scores above 50). That helped the overall unfavorable index stay at 50.6 for the third time in the last four months. “The signal is that companies seeking credit may be fewer in number, but those that are looking are creditworthy,” Kuehl explained about the drop in new credit applications paired with the relatively similar rejections of credit applications. Disputes was the only other unfavorable to improve in June.
Every manufacturing sector favorable category declined in June; however, dollar collections remained above 60 for the second month in a row for the first time since last June and July. All other manufacturing favorables stayed above 60 as well, resulting in a less than one-point decline month to month.
Manufacturing unfavorables didn’t fare much better with all but disputes reporting a setback, which was still in contraction territory. Dollar amount beyond terms fell out of expansion to 48.7. Credit application rejections and accounts placed for collection remained just inside the expansion zone.
Service sector sales continued to grow this month, reaching 70.1—the first score of at least 70 since December 2005. Dollar collections also sustained positive progress, yet a large decline in new credit applications pulled down the favorable index by more than half a point.
The opposite is true of the service unfavorables, which returned to expansion territory for the first time since March. Upswings in credit application rejections, accounts placed for collections, dollar amount beyond terms and bankruptcy filings helped catapult the overall service index forward a half-point. Dollar amount of customer deductions, however, did fall below the expansion zone.
“There is nothing quite as dramatic as the material chronicled in the last several months, and that is probably a good thing as there was a real desire for some stability. The numbers this month looked a lot like last month, and that is not too bad these days,” concluded Kuehl.
For a complete breakdown of the manufacturing and service sector data and graphics, view the June 2018 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.
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NACM, headquartered in Columbia, MD, supports approximately 13,000 business credit and financial professionals worldwide with premier industry services http://www.nacm.org/services.html, 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 http://creditcongress.nacm.org/ conference is the largest gathering of credit professionals in the world.
Contact:
Michael Miller, 410-740-5560
Andrew Michaels, 410-740-5560
Website: http://www.nacm.org
Source: National Association of Credit Management
Michael Miller, NATIONAL ASSOCIATION OF CREDIT MANAGEMENT, INC., +1 (410) 740-5560, [email protected]
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