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Economic risk rises as CMI drops

NACM’s Credit Managers’ Index (CMI) deteriorated 1.6 points to 52.3 in July, suggesting growing economic risk. “The CMI is back to near non-recession lows,” said NACM Economist Amy Crews Cutts, Ph.D., CBE.
 |  Annacaroline Caruso, CICP, director of communications  |  ,

NACM’s Credit Managers’ Index (CMI) deteriorated 1.6 points to 52.3 in July, suggesting growing economic risk. “The CMI is back to near non-recession lows,” said NACM Economist Amy Crews Cutts, Ph.D., CBE.

The index of favorable factors remains solidly in expansion at 57.6 even with a 1.8-point decline in July and a 1.7-point decline in June.

  • Sales led the decline with a 6-point drop to 55.1.

The index of unfavorable factors deteriorated by 1.5 points to 48.8, moving back to the contraction side after only one month in expansion.

  • This index has only been in expansion territory twice in the past 12 months.
  • Accounts placed for collection is at 46.6 this month, its 26th month in contraction.
  • Dollar amount beyond terms had the largest deterioration, losing 5.4 points to 45.7, after spending the last two months above 50 points.

“This month we heard a definite change in respondent comments toward the negative,” said Cutts. “Supply chains are again an issue with continued geopolitical events around the world as well as weather problems. While the dollar amount of sales is still strong, respondents are noting that it is requiring much more effort to do due diligence on new accounts and a distressing amount of time and expense tracking down payments.”

What CMI respondents are saying:

  • “We are seeing a definite slowdown in new production orders coming in and the deliveries we had scheduled are getting pushed further out.”
  • “Continued supply chain issues have hampered fulfillment in a number of areas pushing customers to turn to other suppliers for similar products and prioritize payment based on product availability.”
  • “Collections continue to improve based on an ongoing focus and improved upfront credit due diligence.”
  • “Past-due dollars have come down over the past month.”
  • “The number of Dun & Bradstreet alerts has tripled. This means higher risk, collections, suits, judgements and tax liens. The number of accounts sent to collection agencies is equal to what was placed in 2008.”
  • “We are starting to see a slowdown in timely payments in the Midwest.”
  • “Seasonal upswing is part of our annual sales cycle. Customers are attempting more payment delays.”
  • “Unseen sluggish start to the season.”
  • “The ups and downs this year have been a rollercoaster but the drop in sales from May to June was dramatic. Sales are also down month over month vs 2023 and down palpably YTD for the same period 2023. Delinquencies have ticked up to the highest level since January.”
  • “I have had to file more liens than usual.”

Sign up to receive monthly CMI survey participation alerts. For a complete breakdown of manufacturing and service sector data and graphics, view the July 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.