After a string of solid results in NACM's Credit Managers' Index (CMI) starting this past spring, the predictive index is at its worst output since April. The October CMI reading dropped nearly two points to 54.5 from 56.4 in September.
"This is not an emergency situation to be sure as these numbers are still solidly in the mid-50s, but it isn't the trend that had been hoped for at this point in the year," said NACM Economist Chris Kuehl, Ph.D.
Much of the deterioration was found in the favorable factors, with sales declining more than six points to its lowest level in 2018. Overall, the favorables sank to 61.6.
Within the unfavorable factors, bankruptcies slipped below a score of 53 for the first time since May 2017. The overall unfavorable index dipped into contraction territory (score below 50) for the first time since April.
"This was a fairly profound slide which comes at an awkward time. This is the time of year services should be carrying the load, but it isn't at the moment, while manufacturing generally slides until the first of the year," concluded Kuehl.
The full October CMI report will be published Oct. 31 on NACM's website.
-Michael Miller, managing editor