Credit Managers' Index for October Falls

The October Credit Managers’ Index, available now at, reflected the mood of the overall economy, one with some aspects point in a positive direction and others decidely the opposite.

The sense is that a few of the big issues that have been affecting other economic measures are having an impact on the CMI. While it is hard to point explicitly at the “fiscal cliff” as a cause for overall decline, it is quite apparent that the uncertainty affecting business decision-making is having an impact, as some of the future indicators are weaker than expected at this point.

The most distressing category in this month’s survey, and the one that seems to point to the fiscal cliff issue, would be sales. CMI statistics on sales show a decline to the lowest level since the middle of 2011. While disappointing and troublesome, sales remains in expansion terriorty, if nothing else.

"The silver lining in this case would be that a solution to the crisis would likely result in a jump in capital expenditures and investment in general, said Chris Kuehl, PhD, economist for the National Association of Credit Management (NACM) regarding the fiscal cliff issue. "The downside is that the powers that be could still allow the unthinkable to occur."

Meanwhile, favorable and unvavorable factors stayed on the encouraging side of the growth/contraction line. However, one particular category of importance showed a significant decrease. Dollar amount beyond terms sported the biggest decline among unfavorable factors. In the past, this has indicated that companies are starting to struggle to meet their obligations, and in the months to come some of the other negatives start to accelerate.

The complete CMI report for October 2012 contains the full commentary, complete with tables and graphs. CMI archives may also be viewed on NACM’s website.

-NACM Staff

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