March CMI Plummets as Outbreak Continues

Not much good will come by looking at the raw numbers of the March Credit Managers' Index from NACM, yet it's not all bad. Despite a massive 7.2-point combined decline in March, mostly due to only a couple factors, there are several places to find some hidden gold.

The coronavirus has hampered the global economy for weeks, but it is only now actually showing up in the CMI data, albeit at a drastic rate in some categories. The positives can be found in the unfavorable factors, where all but one remains in expansion territory (scores above 50). Dollar amount beyond terms fell roughly 10 points, coupled with multiple, double-digit drops in the favorable factors. Accounts placed for collection stayed the same in March, and disputes actually improved. Filings for bankruptcies only declined a tenth of a point; however, with the start of the economic decline just beginning in the U.S., this category will likely deteriorate in the coming months.

This is the first time since September 2009 the combined CMI is in contraction territory.

-Michael Miller, managing editor