There are contradictory waves coursing through the economy as the wild enthusiasm that greeted the start of the year has come face to face with reality.
Columbia, MD (PRWEB)
June 30, 2017
According to the June report of the Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM), the combined score reached a level as good as it has been in over a year, with a reading of 56.1. Favorable factors surged to a reading of 63.9, the highest seen this year and for several years prior. Unfavorable factors edged into the expansion zone after dipping into contraction territory last month, typical of the tendency they have followed for the last few years to stay close to the border between expansion and contraction.
“The variability would be more problematic were it not for the fact that this behavior has been mirrored in all kinds of other data streams,” said NACM Economist Chris Kuehl, Ph.D. “There are contradictory waves coursing through the economy as the wild enthusiasm that greeted the start of the year has come face to face with reality.”
Among the favorable factors, sales achieved it best reading of the last several years, surpassing its high in April. The biggest gain was in the category of dollar collections, which increased nearly six points. Amount of credit extended also improved to its best performance in the last few years.
Activity among unfavorable factors was subdued but still important. The big mover, as it has been in previous months, was dollar amount beyond terms, with a jump into expansion territory. “This echoes the dollar collection data to suggest that companies are struggling to keep current with their creditors, but they have not entered into a crisis situation yet,” Kuehl said. Rejections of credit applications and accounts placed for collection showed slight improvement. In June, only two categories remained in contraction territory, while last month there were four.
“This was yet another month that reverses course from the month prior, but it is hoped this back and forth ends, as nobody wants the stability to develop due to a downturn,” Kuehl said.