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Credit Managers’ Index rebounds in May

NACM’s Credit Managers’ Index (CMI) improved 2.6 points to 54.4 in May, regaining ground from last month.

Why it matters: The CMI has showed no clear trend of improvement or decline in the last two years since the world emerged from the pandemic, but business outlook remains pessimistic.

 |  Annacaroline Caruso, CICP, director of communications  | 

NACM’s Credit Managers’ Index (CMI) improved 2.6 points to 54.4 in May, regaining ground from last month.

Why it matters: The CMI has showed no clear trend of improvement or decline in the last two years since the world emerged from the pandemic, but business outlook remains pessimistic.

What NACM’s Economist says: “The CMI oscillates between being on the precipice of recession to solidly in expansion,” said NACM Economist Amy Crews Cutts, Ph.D., CBE.

  • “A little deeper look, and the survey respondents indicate sales are continuously improving and there is no indication that recession risk is even present,” Cutts added.
  • Yes, but: “The number of accounts placed for collection has consistently been reported as rising for about a quarter of respondents each month for the past 24 months, indicating a lot of weakness in business trade.”

The index of favorable factors gained 3.4 points to 61.1.

  • Three of the four factors improved while one remained the same.
  • Sales improved 9.5 points year-over-year.

The index for unfavorable factors improved by 2.0 points to 49.9, marking its second month in contraction territory where it has been for 10 of the past 12 months.

  • Dollar amount beyond terms recovered from the steep drop in April, marking a 7.2-point improvement back into the expansion zone with a value of 51.0.
  • Accounts placed for collection is at 44.9 this month, marking its 24th month in contraction territory.

What CMI respondents are saying:

  • “Customers are looking for longer credit periods across the globe. Voice traffic is reducing.”
  • “The number of slower pay-when-paid contractual payments continues to be on the rise.”
  • “We have some divisions that continue to show downward trends and a few others that performed better than last month. There seems to be no rhyme or reason to the ups and downs.”
  • “New customer activity is picking up prior to this time last year. We are increasing capacity at our plants; however, we remain below budget.”
  • “High interest rates are killing small and medium businesses, and this makes the life of anyone in Credit & Collections or Finance that much harder.”
  • “We have started our busy season. Several customers caught up on their past due accounts.”

Sign up to receive monthly CMI survey participation alerts. For a complete breakdown of manufacturing and service sector data and graphics, view the May 2024 report. CMI archives also may be viewed on NACM’s website.

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Annacaroline Caruso, CICP, director of communications

Annacaroline graduated from Boston University in 2019 with a degree in Journalism. Her career has taken her from Dublin, Ireland to South Bend, Indiana before returning home to Baltimore, Maryland. She joined the NACM family in 2021 and helped launch the Extra Credit podcast. Annacaroline is passionate about creating content for B2B credit managers and using her storytelling skills to raise awareness about the profession. She invites story ideas at annacarolinec@nacm.org.