The Credit Manager’s Index, a gauge of economic factors affecting credit and collection professionals, fell 0.3 points in September to 54.8 from August’s 55.1, and 2.3 points below 57.1 in the same month last year, according to the National Association of Credit Management.
Any score above 50 indicates economic improvement. The index is made up of five favorable factors, such as the amount of credit extended, and five unfavorable factors, such as bankruptcy filings. The index provides a benchmarking and forecasting tool that looks at the entire cycle of business transactions from sales to collections. September’s score for “dollar collections” was 60.0, a slight dip from 60.1 in August and flat with the same month last year. The score for “accounts placed for collection” dropped to 49.0, 1.7 points below 50.7 in August and down 6.0 points from 55.0 in September 2006. Bankruptcy filings increased 0.5 points to 57.7 in September from 57.2 in August, bringing it to the highest point in 2007. Filings declined 2.5 points, however, from 60.2 in September 2006. “The data indicate the economy is definitely deteriorating but … at a rather slow pace,” says Dan North, chief economist for credit insurer Euler Hermes ACI, based on the CMI results. “The credit managers who have done so well keeping problems to a minimum up until now might find a more challenging environment in the rest of 2007 and into 2008,” he warns. Source: www.creditandcollectionsworld.com Source: RiskCenter.com
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