U.S. companies have plenty to be optimistic about in view of NACM’s Credit Managers’ Index (CMI) for October. Retailers gearing up for a better holiday shopping season, more credit applications coming from seemingly worthy customers and top clients asking for substantial levels of credit to buy machines and inventory are just some of the reasons.
Lingering concerns in other areas, however, leave the overall economic picture “jumbled” at least until the U.S. election passes, noted NACM Economist Chris Kuehl, Ph.D.
The latest CMI tracks well into expansion territory at 53.5, although it is slightly off from the September total that came from the biggest one-month improvement in 2016. It shows more strength than the summer months or last year’s holiday season. Much of the hope seems to be driven by a quicker-than-expected rebound by the service sector.
“The gains in the service side this month appear to be in retail, as there is some sense that consumers may be in the mood to spend again,” Kuehl said. “There was also some movement in construction, as there has been renewed strength in the residential category as well as minor growth in the commercial side.”
Kuehl believes credit managers also should be hopeful because the latest CMI data reflect that fewer companies are distressed and “are getting their credit affairs in better order.” Most unease or negativity in October’s data comes from the manufacturing side.
– Brian Shappell, CBF, CICP, managing editor
For a complete breakdown of the manufacturing and service sector data and graphics, view the October 2016 report by clicking here. CMI archives may also be viewed on NACM’s website.