Credit Managers Seeing Extremely Low Growth, Worry About Fiscal Cliff
The National Association of Credit Management has released its economic report for October, and the group saw a decline in its metrics. This is not ever really a market moving number on its own but it is just one more bit of caution in a fragile economy which is barely in a growth environment.
Its October Credit Managers' Index fell to 54.4 in October from a reading of 55.3 in September. The group said, "Some aspects point in a positive direction, and some are decidedly worrying. The sense is that a few of the big issues that have been affecting other economic measures are having an impact on the CMI as well. It is hard to point explicitly at the "fiscal cliff" as a cause for overall decline, but it is also quite apparent that the uncertainty affecting business decision-making is having an impact, as some of the future indicators are weaker than expected at this point."
What stood out the most to the group was sales, with that portion coming down to 57.4 in October. This was the first report under 60 going back to November 2011. The only good news is that the group believes any resolution to the coming fiscal cliff would likely bring about a jump in capital expenditures and investment in general.
Other areas remained rather positive from credit extended, but new credit applications slid. Dollar collections moved down to 54.6 from 58.5.
Overall, the report is still positive because it is above that 50.0 line. Unfortunately, this is just one piece of data showing that growth is extremely low and very fragile.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Economy