The August Credit Managers' Index fell to 52.7 from 53.9 in July, down to levels last seen in 2009, according to a news release from the National Association of Credit Management.
The CMI is created based on a monthly survey of credit and collection professionals, who are asked to rate favorable and unfavorable factors in their monthly business cycle. Any index number greater than 50 indicates growth.
“The news this month is not good and comes as no shock to anyone who has been tracking the data coming from all directions,” NACM economist Chris Kuehl said in the release. "If there is any good news, it is that the combined number has not yet fallen below 50, the threshold separating contraction from expansion."
The index showed improvements in the amount of dollar collections and a slight decrease in the sales category to 59.2 from 60 in July.
According to the release, a silver lining to the news is that the level of bankruptcies has not risen at the same pace.
"That means one of two things. If the economy gets back in gear in the next couple of months, companies struggling now will have some time to gain control of their budgets and be able to avoid sliding further toward collapse and ultimately bankruptcy," Kuehl said in the release. "If the economy doesn’t catch fire to some extent in the near future, the bankruptcy rate will start to climb and the index will reflect it."
The National Association of Credit Management, based in Columbia, Md., serves more than 15,000 business credit and financial professionals worldwide.[[In-content Ad]]