CMI Sneak Peak: Conditions Improve to Spring Levels,

Possibly on Easing Political Rhetoric/Brinksmanship

In the latest Credit Manager’s Index (CMI), now available on the NACM website’s main page, there seem to be rays of hope not seen in months for the economy and the credit industry.

NACM Economist Chris Kuehl, PhD, noted the soon-to-be-released index finds improving September levels for the overall index (53.8), sales (61.4) and favorable factors level (59.9), the latter of which hits its best mark since April. This was all welcome news coming off an abysmal August CMI downturn.

“For the past few months, there was a slow deterioration of key credit conditions and many were expecting to see more declines this month. Instead, the combined index returned to the levels set in July,” Kuehl said. “The overall sense at this stage is that there is some life left in the economy. There is still not enough evidence to be convincing, but the most chronically optimistic could say that a recovery is at hand. The data, however, is sufficient enough to make the case that the precipitous plunge predicted for the end of the year may not be taking place after all. Not that there is no threat of sinking back into recession, but a deep plunge seems more and more distant.”

It appears a big part of the setback in August can be laid squarely at the feet of federal lawmakers and their partisan brinksmanship tactics.

“There is abundant evidence that business activity is ramping up again from the drops in August, and it is looking more and more like much of the summer slowdown was prompted by all the political infighting,” said Kuehl. “The fact that August showed such a pronounced dip suggests that there really is something to that concern.”

Brian Shappell, NACM staff writer