With the September combined score of NACM’s Credit Managers’ Index reaching its best level so far in 2017, it may be that the gains seen in August have established themselves into a positive pattern.
“The hope is that this may be the start of a nice little trend for the end of the year,” said NACM Economist Chris Kuehl, Ph.D.
The September index’s combined score came in at 56.5, an increase of more than a point from August. Most of the progress came from the favorable factors, whose combined score reached 63.5, the highest since April. Though there was some weakness remaining in the unfavorable factors, most of them are in expansion territory in the 50s.
Among the favorable factors, the sales reading is at its best level of the year, while the most volatile category, dollar collections, returned to the 60s this month. The reading for amount of credit extended stayed roughly the same. “There is still evidence that most of the credit is being issued to some of the larger companies,” Kuehl said.
The unfavorable categories—which include accounts placed for collection, disputes and filings for bankruptcies—remain close to the contraction zone (below 50), but all except one are above 50, and all are trending positive.
The performance in the manufacturing sector has been more positive than expected in the country as a whole. “Much of this can be attributed to a boost in export over the last few months,” Kuehl said. Favorable factors for manufacturing are all in the 60s.
Improvement in the service sector was more robust than in manufacturing in September, though its categories can be more volatile. The overall score for the sector was 57.1, a significant rise from August’s 55.1.
“Once more, there may be some expectation of stability and a trend toward the positive,” Kuehl said. “The favorable factors are improving, but the unfavorable numbers are still lagging badly.”
– Adam Fusco, associate editor
Click here for a complete breakdown of the manufacturing and service sector data and graphics. CMI archives may also be viewed here.