It appears that NACM’s Credit Managers’ Index for January will join the ranks of the cautiously optimistic. While other indicators were trending in a positive direction or at least stable at the end of 2014, the CMI had been sounding the warning bells and trended the wrong way. But the combined index is expected to rise in January, according to data being released Friday morning by NACM.
January's CMI is not expected to be a spectacular turnaround given, but it is at least moving in the right direction. Overall, the index of favorable factors are expected to remain the same as in December, in part because the important "sales" category will not show drastic improvement in January. The real changes are likely in the CMI's unfavorable categories, especially in the “dollar amount beyond terms” and “dollar amount of customer deductions” categories.
Also, within the unfavorable categories, look for an uptick in “rejections of credit applications,” which would indicate fewer but more creditworthy applicants are in the pool at present, and a drop in "accounts placed for collection," which would further indicate that companies are in distress and unable to stay current with their debt.
- NACM Staff
Check back here Friday morning for links to the latest, detailed CMI data for January or visit www.nacm.org directly.