For those who export to the United States the latest news from the credit front is not encouraging: The optimism that had given rise in recent month has taken a sudden hit in March 2011 as there have been sharp declines in sales, new credit applications, dollar collections and the amount of credit extended.
The overall index dropped from 64.1 to 62.2. This is not exactly catastrophic as the index remains in the 60s but the pace has dramatically slowed and that is hardly what had been anticipated or hoped for.
The most dramatic change in the CMI data is in the category of dollar collections, as the index has slipped back to levels not seen since November of last year. All of the gains made in the favorable categories in February have been reversed; the index numbers are now back to where they were at the end of last year. The real damage here is not that the numbers are drastically reduced—they are still holding fast in the 60s and upper 50s as far as the index is concerned. The real problem is that expectations had been high and it was anticipated that these numbers would be well into the mid‐60s by now. There had been some expectation that gains would be placing these index numbers into the 70s by mid‐summer but that is no longer the most likely scenario. The gains seem to have stalled for the moment, and it is not likely they will start up again as long as the global situation remains fundamentally unpredictable.
Courtesy Dr. Chris Kuehl, Armada Corporate Intelligence and Economist of the US based NACM (National Association of Credit Managers)