Credit Managers’ Index Looking to Open 2016 with Positive Trend

NACM’s Credit Managers’ Index for January, to be released Thursday morning at www.nacm.org, is expected to show significant improvement overall, though some trouble spots still exist. Even with projected improvement, the CMI’s combined reading is more likely to rival October’s showing (53.9) than 2015’s July peak (56).

Pushing any potential positive trends for the combine index would be the performance of favorable factors categories. Although a surge in the sales category would be most appreciated, increases in new credit applications, dollar collections and amount of credit extended are more likely to carry that side of the CMI equation. Don’t expect much from combined unfavorable factors readings, which appears mired near the contraction zone (anything below 50).

NACM Economist Chris Kuehl, PhD. suggested that some of the positives in the January data may have  counterbalances in other categories. “It appears there is interest in new credit and that means that companies are considering expansion,” Kuenl noted. “The cautionary note here would be an increase in rejection of credit applications in the unfavorable indices.”

However, Kuehl noted that the ongoing willingness of creditors to extend terms is a good sign.

“This suggests that there are some good customers with good credit out there," Kuehl said.


- NACM

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