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.
"Respondents continue to note the financial stress of their customers, asking for term extensions, falling behind on payments and asking for more credit than is warranted, which leads me to think we will see some downward revisions to the private domestic investment numbers in subsequent third quarter GDP estimates," Cutts said.
The index of favorable factors fell 2.7 points to 55.9, led by a 6.1-point drop in sales. The sales factor index has been the most volatile in 2023 and is down 9.3 points from its recent high of 62.0 in June. "The sales factor index, while still in expansion territory, is greatly diminished from where it was in 2021," Cutts explained.
Unfavorable factors fell for the fifth consecutive month in October, this time dropping 0.6 to 48.1. Dollar amount beyond terms led with a decline of 4.9 points to 45.6, its lowest level since April 2020. Accounts placed for collection deteriorated by 1.8 points to 45.6, its lowest level since February and the 17th consecutive month that the index has recorded a value below 50.
"While a few respondents have noted that recent months have been very good, the overwhelming concern cited this month is deterioration in customer cash management," Cutts said. "Whether they are asking for more time to pay, or just ignoring invoices until they get sent to collections, respondents noted that stress is rising in their accounts receivables portfolios."
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-Annacaroline Caruso, editor in chief