The Credit Managers’ Index (CMI), due for release by NACM on Thursday morning, isn’t expected to set any records, but the February statistics do appear set to track more favorably than in January.
One of the most important factors to watch, sales, is expected to show an uptick even though non-business factors seem to be playing a significant role as a drag on the category. “The strength of this indicator can’t be overlooked, as this signals substantial activity despite all the concerns registered over the ‘fiscal cliff,’ the debt ceiling and the sequester” said NACM Economist Chris Kuehl, PhD. “However, the impact has been hard to figure out. On the one hand, it is pretty obvious that the lower GDP number from the fourth quarter was directly related to fiscal cliff concerns within the business community, but the latest revisions show no dip into recession, as first thought.”
Unfavorable factor index categories are expected to show progress or at least stability. Also expected to track well are service-side indicators, in part because of what appears to be the long-awaited rebound of the housing sector. Granted, it has a long way to go. The manufacturing sector likely will be dicier in the February CMI.
Words like “caution” and “reluctance” appear to be the most bandied about in the manufacturing world, again, most likely because of ongoing problems to get things done by Washington, DC lawmakers. And, since manufacturing-based decisions must be made in advance, confidence in where things are going is crucial. That has been largely absent in advance of the February CMI.
“All of this is taking place against a backdrop of political drama that many believe will cause serious economic dislocation before all is said and done, and it seems to be the manufacturing sector that is harboring the most concern,” said Kuehl. Fortunately, with some of the most stressed sectors on the service side making what look to be a series of comebacks, it should be enough to offset the uncertainty that is dogging manufacturing at present.
-National Association of Credit Managment
The February CMI, with full statistics and analysis, are available now at www.nacm.org.