The latest Credit Managers' Index (CMI), published by the National Association of Credit Management (NACM), showed a minor decline in July, led by a sharp drop in collections.
The "dollar collections" category hit one of the lowest readings of the past year—only three months in the last twelve were lower than in July, suggesting that there are some additional strains showing up within the creditor community. All of the other favorable factors declined, as did the overall favorable factor index.
News in the unfavorable category was more positive, but not by much, as the unfavorable index also fell in July. "Rejections of credit applications" and "filings for bankruptcies" were the only categories to improve, reinforcing the notion that there is still tolerance for risk in the credit community and "accounts placed for collection" remained essentially flat.
Despite the declines, the CMI mirrored many other pieces of recently released data that seem to show the economy slowing moderately. The July data suggest that growth has slowed, but not enough to plunge companies into full-blown crisis. "Given that the national data has been pointing towards a slowing economy this is not too shocking," said NACM Economist Chris Kuehl, PhD. "There are some clear areas of retreat, but just as important is the fact that there are some clear areas of growth and that provides some encouragement for the rest of the year."
A full copy of July's CMI report, complete with graphs and commentary, can be found here.