Trisha Shetty (Editor)

Credit Managers' Index

Updated on
Share on FacebookTweet on TwitterShare on LinkedInShare on Reddit

Credit Managers’ Index


The Credit Managers' Index (CMI) is a monthly economic indicator financial activity reflecting credit managers’ responses to levels of favorable and unfavorable factors. The measure has been sourced in stories from publications such as the Wall Street Journal, CFO and Bloomberg.

Tracked since February 2002, the CMI is produced by the National Association of Credit Management (NACM) and is currently conducted by Armada Corporate Intelligence’s Chris Kuehl, PhD, who also serves NACM economic advisor. The CMI is compiled through a voluntary poll of credit and finance professionals in the service and manufacturing sectors. The CMI results generally are released on the last business day of each month.

A CMI number of more than 50 indicates an economy in expansion; less than 50 indicates contraction.

Unlike many economic indexes, the CMI resisted the month-to-month swings during the most recent economic downturn. The index accurately signaled that the economic plunge was stabilizing and beginning to recover from the recession.

The Chartered Institute of Credit Management (CICM) in the UK produces a similar Index on a quarterly basis reflecting its members' responses to questions about the same factors and it uses the same methodology. The CICM issues a press release each quarter reporting the results of the Index which receives media coverage.


The index is based on survey responses of approximately 1,000 trade credit managers in the second half of each month. There is typically an approximately equal representation between the manufacturing and service sectors. Respondents from throughout the United States are asked to comment on whether they are seeing improvement, deterioration or no change for various favorable and unfavorable factors.

The computation of seasonality is based on the formula used by the U.S. Census Bureau and most of the federal government’s statistical gathering apparatus. This is designed to streamline comparisons between the CMI diffusion index and comparable indices—such as those from the purchasing, supply chain managers and others.

Factors Making Up the Diffusion Index include 10 categories, each of which weighted equally and found within two main categories:

Favorable factors:

  • Sales
  • New credit applications
  • Dollar collections
  • Amount of credit extended
  • Unfavorable factors:

  • Rejections of credit applications
  • Accounts placed for collection
  • Disputes
  • Dollar amount beyond terms
  • Dollar amount of customer deductions
  • Filings for bankruptcies
  • Definitions and Explanations

  • Diffusion index -- calculated for each item with the overall CMI being a simple average of the 10 categories. Survey responses for each item capture the change—higher, lower or the same. The results are compared contrasting the current period/month to the previous one.
  • For positive indicators, the calculation is as follows: number of “higher” responses plus ½ multiplied by the number of “same” responses and then divided by the total number of responses.
  • For negative indicators, the calculation is as follows: number of “lower” responses + ½ multiplied by the number of “same” responses and then divided by the total number of responses
  • Verification

    [1] Chartered Institute of Credit Management (CICM) website






    Credit Managers' Index Wikipedia

    Similar Topics
    No Sail
    Chintoo (film)
    Jim French (baseball)