The National Association of Credit Management reported that the CMI’s combined score for the manufacturing and services sectors dropped to 55.6 in March.

Despite the reported dip, Chris Kuehl, a NACM economist, does not believe the is any reason to be alarmed, arguing that it is just an indication that certain expectations simply weren’t met.

The CMI kicked off 2018 with a modest gain over December’s second-lowest reading of the year by reaching just above the mid-50 mark, pushing forward to its second-highest, yearlong reading of 56.5 in February.

Although February’s results were still too early to classify the year’s earlier gains as a “positive trend,” Kuehl previously expressed optimism for at least the first six months of 2018 in what he explained as a “two-phase year.” His predictions foresaw benefits to credit managers thanks to the tax legislation and more spending money through June, followed by spurred inflation from the Federal Reserve. In his latest analysis for March, Kuehl said the expectations of the tax reform weren’t met.

“It is starting to look like a bit of a dud. That was the concern from the start, as it was coming so late in the game,” he said. “At this point, it doesn’t appear to have had that much of an impact, but there may be an upside to this. Without that surge in growth, there has been less threat of breakout inflation and the pressure on the Fed to hike interest rates.”

The more noticeable declines in March were shown in the combined score’s favorable factors, where sales and dollar collections fell from the high 60s and low 60s, respectively, to the mid-60s (64.1) and high-50s (59.6). Half of the unfavorable factors remained in contraction territory (a score under 50), however, Kuehl said large customers are still receiving plenty of credit, as the amount of credit extended stayed in the high 60s.

The manufacturing sector was hit a bit more than the service sector. The former fell from 56.2 to 55.2 due to drops in all four favorable factors. Readings for sales (62.5), new credit applications (62.4) and dollar collections (59.5) changed by about three points, while changes to the amount of credit extended were limited. Despite remaining just above contraction territory — as seen in February — increases were reported in rejections of credit applications, accounts placed for collection and dollar amount of customer deductions.

“The thinking behind the tax cuts and other measures was that producers would be providing their own demand, as this move has been a return of supply-side economic theory,” Kuehl said. “It has not panned out, but time will tell.”

In the service sector, the reading fell less than one point from 56.8 in February to 56.1 in March. Both favorable (63.9) and unfavorable factors (50.8) were minimally impacted. New credit application numbers and the amount of credit extended improved over last month, but not enough to account for the decline in sales and dollar collections. The unfavorables had the most increases in credit application rejections as well as slight gains in accounts placed for collection, dollar amount of customer dedications and bankruptcy filings.

Since 2014, a look back at the CMI showed March improving over February, except last year when Kuehl noted a decline, which he attributed to a “dampening enthusiasm” from legislative setbacks. Over the past four years, gains were reported in the CMI from March to April except for 2016—substantial increases that have Kuehl crossing his fingers in the coming month, following “rollercoaster performances.”

“The good news is that the numbers are respectable and even robust when looking just at the favorable factors,” Kuehl said. “There are reasons for caution, but few reasons for any sort of panic. It has been more a matter of disappointment that things are not better than this after all the changes at the start of the year.”