The Credit Managers’ Index remained largely unchanged for the third consecutive month, according to the latest figures from the National Association of Credit Management.
The index did drop slightly, from 53.7 in October to 53.5 in November, which would not ordinarily be great news, but as September’s data was particularly strong, it is no bad thing that October and November remained pretty much the same.
“There is a story for just about everyone these days,” said Chris Kuehl, economist for the NACM. “If one is of a more pessimistic bent, there is the continued high rate of unemployment, the struggles in the housing sector and the sense that nobody in the political realm has a clue what to do about any of this.
“There is the mess in Europe, the gyrations in stocks and consumer polls that suggest that vast numbers of people are in bed with the covers pulled over their heads. If you tend toward optimistic, there is something for you as well, especially recently.”
Retail numbers are coming in far more robust than anybody anticipated. Black Friday totals were almost 7 percent above last year and records were set in terms of dollar expenditures.
Subsequent Cyber Monday sales were also dramatic, and there is evidence that manufacturers are setting up to do far more capital spending than in past years. “It would be nice to see some gains in select areas,” said Kuehl, “but there are no emergency warning signs popping up at this point either.”
The CMI figures suggested that fewer companies are now in financial distress. This is partly the result of an economic rebound and partly because those companies in trouble months ago have either self-corrected or have gone out of business. The index did not shift dramatically, but it moved slightly in the right direction from 49.9 to 50.1.
The biggest change was in the filings for bankruptcy number. There was a substantial improvement in the index from 53.8 to 56.7, the best performance since May. The indication is that those companies weakened by the recession have already fallen by the wayside and, for the most part, every industry is now working with the survivors.
“This is not to say that they don’t have their own financial issues,” explained Kuehl, “but, going forward, many companies will see opportunities to gain market share from those competitors that have left the scene and that strengthens their ability to gain momentum in the coming year.”
