CMI Could Begin Summer with Firm Rebound

The numbers in NACM’s June Credit Managers’ Index (CMI), which will be released Friday at nacm.org, are likely to reflect a strong monthly rebound in business conditions. The index has been on a roller-coaster ride over prior months, mirroring the volatility in many kinds of economic data streams.

“The fact is that there are contradictory waves coursing through the economy as the wild enthusiasm that greeted the start of the year has come face to face with reality,” said NACM Economist Chris Kuehl, Ph.D.

Following a decrease in May, expect the June CMI to bounce back and achieve highs not seen in months, as preliminary data indicates healthy readings in both favorable and unfavorable categories, driven in part by the same two categories that have fluctuated in prior months—dollar collections and accounts beyond terms.

The movement of preliminary manufacturing data appears to be riding in tandem with the overall index, which may be benefitting from a bump in new sales. But cautionary notes could remain for manufacturers, as may be reflected in some of the unfavorable categories. “There is still a lot of financial damage to work through and many companies have been forcing collection activity,” explained Kuehl.

Volatility could also be the name of the game in the service sector for June. “This is an odd time of year for services in general as this is the height of both the construction season as well as the travel season, but retail is generally down as there are no big spending holidays to spark a rush to the stores,” said Kuehl. “This year the construction sector has been very active and vacation season has been better than it was last year.”

– Nicholas Stern, senior editor

For a complete breakdown of the manufacturing and service sector data and graphics, view the June 2017 report on Friday morning by clicking here. CMI archives may also be viewed on NACM’s website.

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