Tag: Economy

NACM’s Credit Managers’ Index (CMI) remains in a narrow range around non-recession lows as it gained 1.1 points to 52.3 in November. However, credit managers are growing increasingly concerned about the state of the economy, citing more delinquent accounts, poor application quality and more bankruptcy filings.

Israel’s almost $500 billion economy—the most developed in the Middle East—was healthy for most of 2023. Then on Oct. 7, Hamas launched an attack on Israel that quickly became the deadliest of the five wars fought between the sides since Hamas seized control of the Gaza Strip in 2007. It’s been more than one month since that attack and the economic implications are beginning to surface. Customers in Israel are paying on average 41 days beyond terms according to FCIB’s October Credit & Collections Survey. Nearly three in every four credit managers say payment delays are increasing due to the…

The holiday season is one of the most anticipated sales periods for businesses every year—and holiday spending surged to record levels over the last three years amid pandemic-era stimulus money. Despite inflationary pressures and high interest rates, spending is expected to grow between 3% and 4% to roughly $966.6 billion. Although this is a slower growth rate than the past three years, it is consistent with the average annual holiday increase of 3.6% from 2010 to 2019, according to the National Retail Federation (NRF).

The U.S. economy remains resilient with robust job growth, steady consumer spending and strong GDP growth of 4.9%—all despite one of the most highly anticipated recessions ever. However, many factors continue to weigh on the economy and have the potential to offset the positives. A recent eNews poll revealed more than two-thirds of credit professionals believe a recession is around the corner if we are not in one already, while only 31% see the chance of a soft landing.

NACM’s Credit Managers’ Index (CMI) fell 1.4 points to 51.2 in October. The CMI remains just barely in expansion territory above 50 and its lowest levels seen outside of a recession, said NACM Economist Amy Crews Cutts, Ph.D., CBE.

With Congress racing towards a government shutdown on Oct.1—an outcome that is looking more and more likely—let’s look at the three most recent shutdowns and what you can expect this time around.

Commercial bankruptcies have skyrocketed since the historical lows during the height of the pandemic. At 236 corporate bankruptcy filings so far this year, the number is higher than the first four months of any year since 2010 and more than double 2022 levels, according to S&P Global Market Intelligence. They forecast that the U.S. default rate will rise to 4.25% by the beginning of next year, up from 2.5% currently—or to 6.5% if there is a serious recession.

NACM’s Credit Managers’ Index slipped 1.6 points in May to 52.2, nearly erasing three months of improvement. This indicates the economy could collapse under the mounting pressure of lingering debt ceiling issues, interest rate hikes and continued stress in the banking sector, said NACM Economist Amy Crews Cutts, Ph.D., CBE.

Treasury officials have warned lawmakers to come to an agreement prior to the X-date of when reserves will run dry. The X-date depends on both tax collections and government payments, and if there is not enough money to provide for the country’s financial obligations, the likelihood of a default is very high.