NACM Credit Managers’ Index to Close Year on Weak Note

Although it would have been nice to end the year on a high note, data in the final Credit Managers’ Index for 2014, to be released on NACM’s website tomorrow/Wednesday, will illustrate weakening conditions. In fact, some categories are expected to show the worst performance since the start of the year.

There are two major problems with this data: it is not readily apparent why the numbers are so disappointing, when many other economic indicators for the economy are stronger, and real weakness exists in the unfavorable factors categories. The latter indicates problems as far as financials are concerned. With the majority of the bad news expected in the unfavorable categories, it makes early 2015 that much harder to forecast.

“Given that some of the other national data has been improving, it begs the question why credit data is not pointing in the same direction,” said Chris Kuehl, PhD, NACM Economist. “At first blush, it appears that there have been stressors all year and that some companies have been able to cope better than others. For companies that were weak to begin with, there has not been enough growth to pull them out of it.”

Favorable factors will remain in pretty strong territory, even as the sales category is unlikely to reach high expectations in December’s CMI. Data from the service sector will prove far better than its counterpart in manufacturing, but not good enough to offset the latter’s losses.

“This is not too shocking given the fact that this is the prime time for the retail community and, by all accounts, the last month was pretty impressive for the retailers,” Kuehl said.

- NACM
Complete December CMI data will be available on the NACM website (www.nacm.org) Wednesday morning. Additional coverage will also be in this week’s edition of NACM eNews.

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