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CMI reveals cracks in otherwise stable business economy

NACM’s Credit Managers’ Index (CMI) fell 0.4 points to 53.1 in September, showing expansion but at a weakening pace. “Hopefully this is indicative of the soft landing the Fed has been aiming for,” said NACM Economist Amy Crews Cutts, Ph.D., CBE.
 |  Annacaroline Caruso, CICP, director of communications  |  , ,

NACM’s Credit Managers’ Index (CMI) fell 0.4 points to 53.1 in September, showing expansion but at a weakening pace. “Hopefully this is indicative of the soft landing the Fed has been aiming for,” said NACM Economist Amy Crews Cutts, Ph.D., CBE.

The index of favorable factors fell 2.6 points to 56.5, remaining solidly in expansion.

  • Dollar collections took the biggest hit, falling 4.5 points to 57.5.

The index of unfavorable factors improved by 0.9 to 50.8 after two months in the contraction territory.

  • Accounts placed for collection is at 48.9 this month, its 25th month in contraction.
  • This means the number of accounts placed for collections has increased every month for more than two years.

“The credit ecosystem is more complicated than it might seem,” said Cutts. “The recent rate cut by the Federal Reserve, and likely regular subsequent rate cuts over the next year, should start to provide some relief for borrowers and those seeking new credit. But the outlook is clouded.”

What CMI respondents are saying:

  • “Delinquencies remain stubbornly high.”
  • “We see unexpected closures of customer business.”
  • “We are experiencing a backorder situation again and more accounts have been slow to pay this month.”
  • “More and more of our customers are not able to pay due to slow or nonpayment from their own customers.”
  • “We see slowness in some of our end markets, such as residential construction and some commercial construction (strip malls, warehouses, data centers). We expect this to continue through 2024.”
  • “High interest rates have curbed new home business.”

The bottom line: Despite showing expansion, the CMI has fallen to 53.1 in September, indicating a slowing pace.

Sign up to receive monthly CMI survey participation alerts. For a complete breakdown of manufacturing and service sector data and graphics, view the September 2024 report. CMI archives also can 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.