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A stronger CMI comes with a catch

The combined Credit Managers’ Index (CMI) improved 0.5 points to 55.2. Stronger favorable factors, particularly gains in Dollar Sales and Dollar Collections, drove the increase, while both the manufacturing and service sectors remained in expansion. However, persistent weakness in Accounts Placed for Collection and growing concerns about payment resistance suggest that cash-flow pressures have not fully eased.
 |  Sara Asomaning, Managing Editor

The combined Credit Managers’ Index (CMI) improved 0.5 points to 55.2. Stronger favorable factors, particularly gains in Dollar Sales and Dollar Collections, drove the increase, while both the manufacturing and service sectors remained in expansion. However, persistent weakness in Accounts Placed for Collection and growing concerns about payment resistance suggest that cash-flow pressures have not fully eased.

“Dollar Sales was thought to be a favorable factor when the CMI was created in 2003, with the idea that it indicates growing business pipelines,” said NACM Economist Amy Crews Cutts, Ph.D., CBE®. “But in the current environment the interpretation is less clear. It is hard to know whether this strength in the Dollar Sales CMI is a reason for optimism or worry about the near term.”

By the numbers: The Index for Unfavorable Factors was unchanged from last month and sits at 50.5 points.

  • Four of the six unfavorable factors deteriorated in the October survey. The largest decline was in Dollar Amount of Customer Deductions, which lost 3.6 points to 50.1 points.
  • The Index for Favorable Factors improved 1.1 points in this month’s survey and now sits at 62.2 points. Half of the favorable factors improved, led by a 4.1-point gain in Dollar Sales.

What respondents are saying:

  • “There is an overall downturn of sales and production being seen in our industry.”
  • “Data Centers continue to drive growth, while we are now starting to see signs that excess cash is drying up in some cases and past dues for a hand full of companies are an issue. Customers continue to say they have orders out until mid-2027 and beyond.”
  • “Customers are trying to push back on payment terms.”

Read the full report here.

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Sara Asomaning, Managing Editor

Sara Asomaning holds a B.S. in English from Towson University. With a background in writing, copyediting and proofreading, she has a keen eye for detail. Outside of work, she spends much of her time being creative with music, photography, and social media content creation.