Skip to main content
, ,

CMI gains despite economic stress

NACM’s Credit Managers’ Index (CMI) has been hovering near non-recession lows for more than a year. In August, the CMI gained 1.2 points to 53.5 despite economic hardship.
 |  Annacaroline Caruso, CICP, director of communications  |  ,

NACM’s Credit Managers’ Index (CMI) has been hovering near non-recession lows for more than a year. In August, the CMI gained 1.2 points to 53.5 despite economic hardship.

The CMI has gained 3.6 points over the past 12 months. “The economic stress seems to be rising, even if not fully shown in the CMI values,” said NACM Economist Amy Crews Cutts, Ph.D., CBE. “Many respondents are hoping for the Federal Reserve to begin cutting rates soon.”

The index of favorable factors improved 1.7 points to 59.1.

  • Dollar collections showed the biggest improvement with a 6.7-point jump to 62.0.
  • Amount of credit extended slipped 2.2 points to 58.6 and new credit applications fell 1.1 points to 57.1.

The index for unfavorable factors improved by 1.8 points to 52.3—its strongest reading in the past 12 months.

  • Accounts placed for collection is at 46.6 this month, its 24th month in contraction.
  • This means the number of accounts placed for collections has increased every month for the past two years.

“Respondents continue to indicate a marked pessimism regarding conditions that started last month,” Cutts said. “Several respondents noted that conditions are getting worse, with higher effort needed both on the sales side and the accounts receivables side to make things happen.”

What CMI respondents are saying:

  • “New orders and sales are off, which impacts many other metrics. I am anticipating having to increase [our] bad debt reserve.”
  • “Sales are up month-over-month, but down 10% year-over-year.”
  • “Sales and AR are still recovering from the previous few months of weather effects (mostly TX-related). Bankruptcy activity seems higher this year, and customer payments are slower in general. Our sales team is chasing more leads to generate the same volume.”
  • “Demand letters seem to be working for the older collections. Customers are paying and we are keeping a working relationship with a limited credit line open.”
  • “We are seeing payment creep i.e. customers moving from 10 slow to 15 slow.”
  • “It’s becoming very evident in evaluating customer financial information that elevated interest costs have impacted bottom lines.”
  • “Business is stable yet underperforming a bit.”

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

Go to Archive

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.