NACM's CMI Begins 2020 with a Bang

The Credit Managers' Index (CMI) is off to an overwhelming start to 2020. While other indices such as the purchasing managers' index are down to begin the new year, the CMI rebounded in January from a down December to reach a nearly three-year high. "Given that credit managers tend to think in the future, this month's good data may be seen as a harbinger of things to come," said NACM Economist Chris Kuehl, Ph.D. "Not that everything is likely to come up roses in the next several months, but for the time being the threats seem a little more distant than expected."

The combined CMI reached a reading of 56.4, up 1.8 points from December, and it is back at levels seen in mid-2019. Much of the gain is due to the large jump in the favorable factors; however, the unfavorables improved as well. The favorables increased almost three points to 62.2, the highest reading since May. All four factors were in the 60s—sales leading the way at 63. This is the first time all four factors are in the 60s since August after just missing out in October and November.

More info here.:

https://jessicapressreleases.blogspot.com/2018/04/early-childhood-education-experts-new_30.html

The unfavorables were all in expansion territory (score above 50) for the second month in a row. Dollar amount beyond terms made the biggest gain, standing at 54.2 after being at 51. "There has been a desire on the part of many companies to go into 2020 with a reduced set of credit obligations in order to be better protected should there be some kind of slowdown. This is showing up in the credit data with reduced slow pays and improved dollar collections," said Kuehl. Rejections of credit applications was the only factor to not improve in January; it remained at 52.

Tariffs, trade wars and other economic factors, such as issues at Boeing, were expected to impede the manufacturing sector; however, Kuehl asked if the January numbers were an anomaly or is the sector in better shape than predicted? All four favorable were also in the 60s, and again sales led the way with a nearly six-point swing. While the unfavorables improved, not all sectors did. Rejections of credit applications and dollar amount of customer deductions each declined slightly. Filings for bankruptcies improved 2.4 points. "The important aspect of these readings is nothing like this kind of performance had been expected given all the gloom and doom surrounding the manufacturing sector," said Kuehl. "This can all change in a heartbeat and there have been times in the last year when there has been such a flip, but for now the news is quite encouraging."

New credit applications paced the service sector favorable with a 4.4-point climb, yet amount of credit extended had the highest score of 64.5. "While traffic numbers were good and revenue was up, many reported lower profits as consumers tended to stick to discounted goods; there is just not enough margin in these." Kuehl points out retail did fairly well, mainly due to online merchants and not brick-and-mortars. Unfavorables increased to 52.5 in January from 50.9. Much of the movement can be traced to improvements in dollar amount of customer deductions and dollar amount beyond terms.

"Whether this was an indication of a strong finish to 2019 or a good start to 2020 the data is encouraging," Kuehl concluded. "Now, all eyes will be on next month to determine which month was the anomaly—the shrinking December or the booming January."

For a complete breakdown of the manufacturing and service sector data and graphics, view the January 2020 report at http://web.nacm.org/CMI/PDF/CMIcurrent.pdf. CMI archives may also be viewed on NACM's website at http://www.nacm.org/cmi/cmi-archive.

ABOUT THE NATIONAL ASSOCIATION OF CREDIT MANAGEMENT
NACM, headquartered in Columbia, Maryland, supports approximately 11,000 business credit and financial professionals worldwide with premier industry services, tools and information. NACM and its network of affiliated associations are the leading resource for credit and financial management information, education, products and services designed to improve the management of business credit and accounts receivable. NACM's collective voice has influenced federal legislative policy results concerning commercial business and trade credit to our nation's policy makers for more than 100 years and continues to play an active part in legislative issues pertaining to business credit and corporate bankruptcy. NACM's annual Credit Congress & Exposition conference is the largest gathering of credit professionals in the world.

Contact:
Michael Miller
Andrew Michaels
Christie Citranglo
410-740-5560

Website: http://www.nacm.org

Source: National Association of Credit Management

.

© Copy Right 2020 Jessica Brown's Press Releases.

All information are taken from the news source. We do not promise anything nor take any responsibility for anything the news owner claim. We just share the news as is. You can contact news owner directly in the message for more information.