Economy’s outlook better, say credit managers

The economic outlook improved in July according to surveys of businesses’ credit managers.

An index generated from the surveys climbed to 53.5 from 52.7 in June, said a report from the National Association of Credit Management that performs the surveys. Any reading above 50 indicates economic expansion, much like the widely watched Institute for Supply Management’s index due out Monday.

Credit managers, however, reported swings in specific areas that mirror volatility in other economic data, said Chris Kuehl, the credit management group’s economist who analyzes the data.

“We saw job creation numbers crash to levels not seen since the recession in May and jump back to nearly record levels in June,” Kuehl said in the report. “The latest durable goods numbers are down due to the reduction in export activity, but the housing sector is showing more strength than it has since before the downturn. Now we see some of that back and forth in the CMI (credit manager index) data as well.”

Favorable economic factors checked by the survey are showing strength. These include sales, amounts of credit extended and dollar collections.

At the same time, unfavorable factors are showing economic weakness. One sign of stress is an increase in applications and increase in rejections, which Kuehl said “indicates that there are more companies in trouble and hoping they find a supplier that will give them credit regardless.”

This story was originally published July 29, 2016 at 9:49 AM with the headline "Economy’s outlook better, say credit managers."