The latest NACM Credit Managers’ Index (CMI) for November is mostly on track with prior months' readings, with post-election jitters sending some mixed signals of enthusiasm in some sectors and trepidation in others. Overall, the CMI score is slightly down at 52.9 from October’s reading of 53.5, but still remains in expansion territory (readings over 50).
“The data from the CMI this month reflects this shifting attitude, but there is an additional caveat to be aware of,” noted NACM Economist Chris Kuehl, Ph.D. “The response to the survey was less robust than it has been in past months. This creates some concern that readings might be skewed as compared with where they have been and might be in future months.”
An interesting dynamic to this month’s reading is found in comparing the favorable factors with the unfavorable ones, where overall favorable factors expanded beyond September’s highs, while unfavorable factors caused the most worry as they dipped below expansion territory to the lowest level so far this year, he said.
The approaching holidays have affected the retail sector as consumers have been active but targeting discounted items that bring in lower profits, Kuehl said. The manufacturing sector has been cautious as companies girded for major changes to the industry in the run-up to the election, no matter who won. The service sector stayed mostly consistent with previous months’ readings as sales increased, new credit applications fell and dollar collections improved. “The sense is that credit requests tend to flag a little this time of year as retailers have already done most of their ordering,” Kuehl explained. “Now, they will be more likely to spend to catch up with the credit they already have.”
Data for rejections of credit applications reflected a drop below the expansion level, while the dollar amount beyond terms category fell off and the accounts placed for collections category declined slightly, he said.
– Nicholas Stern, editorial associate