Credit Managers' Index Could Close 2016 with Cheerful Rebound

Credit managers appear to have rediscovered a spirit of confidence, according to preliminary data in the latest NACM Credit Managers’ Index (CMI), which will be released Friday morning at Pre-election jitters and a lack of clarity that inspired some of the previous months’ volatility may be fading.

Expect the December CMI to show an increase over recent months’ performances. Part of this is because of preliminary data that found manufacturing faring better than expected against formidable headwinds (e.g., the strengthening U.S. dollar and rising Federal Reserve rates). In addition, early signs that an improved (but not record-breaking) holiday sales season versus 2015 activity means that retailers that were previously approaching trouble “will be alive to fight another day.” said Chris Kuehl, Ph.D. That should drive overall improvements to filings for bankruptcies category, which was the only unfavorable factors category within expansion territory (above 50) in November’s disappointing CMI results.

Notable improvements to credit applications are expected in December as well, but it is important to juxtapose them with rejections of credit applications. If the two categories are improving simultaneously, that’s a great sign and will help set the table for a strong start to 2017, Kuehl said.

- Brian Shappell, CBF, CICP, managing editor

For a complete breakdown of the manufacturing and service sector data and graphics, view the December 2016 report on Friday morning by clicking here. CMI archives may also be viewed on NACM’s website.

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