Business overall is good and growth reflected in a variety of economic news lately has reached levels not seen since before the recession that started in 2008, according to the latest NACM Credit Managers’ Index (CMI), released today.
“The sense is that there has to be an improvement in the coming year if there is investment in infrastructure, tax reform and changes in the regulatory system,” said NACM Economist Chris Kuehl, Ph.D. “The challenge for the year is that these changes will take time. Nobody is sure what the patience level for consumer or business will be.”
The combined score in February’s CMI track in tandem with positive growth trends seen in economic indicators like the Purchasing Managers Index (PMI), as manufacturers continue upward momentum seen in the past two months, collect more dollars and extend more credit. “When manufacturers start to get their accounts caught up, this is a good signal that they are planning to start asking for more credit in the near future,” Kuehl said. Not all is well in the manufacturing sector, though, and unfavorable factors in the CMI improved slightly, though at a much less favorable rate, as some firms struggled to catch up with the broader recovery.
Data also show a rebound in a service sector that is leading the way for the CMI in February, backed by stronger demand from consumers. “Retail has been having a surprisingly good quarter and construction has been up along with the medical economy,” Kuehl said.
– Nicholas Stern, senior editor
For a complete breakdown of the manufacturing and service sector data and graphics, view the February 2017 report by clicking here. CMI archives may also be viewed on NACM’s website.