NACM Credit Manager's Index Rises in November

The Credit Manager’s Index rose to 57.4 in November, above October’s 56.6. The Index is now 1.2% higher than last November and represents solid economic growth. An improvement in bankruptcy filings of 9.6% in manufacturing and 8.2% in services contributed most to the gain?a result of the rush to file for bankruptcy before the October deadline introducing more creditor-friendly bankruptcy laws. However, Dan North, Chief Economist with EulerHermes ACI, notes that this improvement was offset by a sharp deterioration in November sales, a pattern likely to be repeated in December as orders typically plunge after the peak holiday season. Aside from these offsetting effects, Mr. North says “it is worthwhile to note that both dollar collections and dollar amount beyond terms improved significantly, both for the month and the year? this data suggests that buyers are able to make payments more easily and are likely to be in better financial health, and that business and economic conditions are looking up.”

Comparison of November 2005 to November 2004
Looking back over the last year at NACM’s CMI, we find a slight improvement. The overall CMI ended at 57.4 percent, compared to 56.2 percent in November 2004. Two factors that had a significant impact in the monthly analysis?a decrease in new sales and fewer bankruptcies?show the converse in the yearly analysis. There was an increase in new sales, up 70 points, and higher levels of customers filing for bankruptcy.

The National Association of Credit Management (NACM), headquartered in Columbia, Maryland supports more than 25,000 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 and education, delivering products and services, which improve the management of business credit and accounts receivable. NACM’s collective voice has influenced legislative 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. More information is available at www.nacm.org.