The beacon of light that illuminated the recovery in July was extinguished this month as the August report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) showed a nearly two-point drop in the combined score—slipping from 56.0 to 54.2.
The CMI has been on a roller coaster this summer with a wide range of performances, explained NACM Economist Chris Kuehl, Ph.D. “That sick feeling that one gets on a roller coaster seems to be affecting those that have been following the gyrations of the CMI this year,” he said. “A good month seems to occur after a bad one and then there is a return to the negative side of the next one.”
Going from 63.5 to 59.2, favorable factors were the main drag. The biggest shift occurred in the sales category and smaller declines were recorded in new credit applications, dollar collections and amount of credit extended. While unfavorable factors increased slightly from 50.8 to 51.0, the categories of rejection of credit applications, disputes, and filings for bankruptcies declined. Small increases, however, were noted in the categories of accounts placed for collection, dollar amount beyond terms and dollar amount of customer deductions.
- NACM Staff