Survey shows positive outlook for manufacturing, services

The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcies.

The manufacturing sector index for July rose nine-tenths of a percent on a seasonally adjusted basis. The rise was driven mostly by an 5.8 percent increase in the sales component and a 9.6 percent increase in the amount of credit extended.  

The July service sector index rose only one-tenth of a percent on a seasonally adjusted basis.

“On a year-over-year basis, the combined CMI rose 1.3 percent, while the manufacturing sector rose 0.8 percent and the services sector rose 1.8 percent,” said Dan North, chief economist with credit insurer Euler Hermes ACI, in a news release. “Eight out of 10 components for the combined CMI rose, while seven of 10 rose in both the manufacturing and services sectors. Overall, the indices reflect the strong economy of the past several quarters.”

The survey comprises 30 components. Of those, only two posted indices below 50. Any number above 50, according to the release, signifies economic expansion.