NACM's April CMI Sinks Deeper into Contraction
To say the Credit Managers' Index (CMI) from NACM is "down in the dumps" is an understatement, yet there are still a few positives in April's CMI. While not bottoming out at the record low seen during the Great Recession, the current combined score of 40.6 is uncomfortably low. January 2009 is the CMI's all-time low with a score of 39.7.
"There has been nothing natural about this global economic collapse as it was not triggered by any sort of economic issue as had been the case with the 2008 recession or any of the other downturns the world has faced in the last several decades," said NACM Economist Chris Kuehl, Ph.D. "The decision to shutter the entire business community in order to deal with a pandemic is creating a crisis that has never existed before and that leaves business with few options other than to simply hang on."
After a 7.2-point drop in March, before much of the coronavirus impacts were registered in the U.S., April declined even further—8.3 points. Similar to March, most of the drastic declines were seen in the favorable factors, which dropped 14.5 points in April. After only a 1.6-point slip in March, the unfavorable factors sank 4.3 points in April.
"The data from the unfavorable categories has been weak, but not quite as catastrophic as is the case with the favorables, and this is simply due to timing," Kuehl said. "This crisis is still fairly young as it began in earnest in March. There has not yet been time for all the negatives to manifest, but they have started to and will become more evident in future readings."