The September report of the Credit Managers’ Index (CMI) from the National Association of Credit Management, which is now available, shows the lowest reading in nearly two years. Though still in growth territory, this was not a good month and that brings a great many concerns to the forefront.
“This was not a small reversal of fortune by any stretch of the imagination,” said NACM Economist Chris Kuehl, PhD. “This could be termed a collapse…The numbers this month are almost shocking and there will be intense interest in what the index reports in the next iteration as this will determine whether this is the start of a depressing trend or just one of those anomalous months.”
There is some hope that August and September are typically difficult to get an accurate read on “given the vagaries of the summer break and the return to school.”
Most of the distressing news in the CMI will be found in the unfavorable factors, which could indicate some real business distress. That index is dangerously close to slipping into contraction territory due to struggles in disputes, dollar amount beyond terms and bankruptcies. All in all, these numbers are bad and signal more distress to come. It is also hard to determine just what the issue is given that much of the other economic data of late has been good.
For a full
breakdown of the manufacturing and service sector data and graphics, view the
complete September 2014 report at http://web.nacm.org/CMI/PDF/CMIcurrent.pdf.
CMI archives may also be viewed on NACM’s website at http://web.nacm.org/cmi/cmi.asp.