The National Association of Credit Management’s Credit Managers’ Index (CMI) held strong in December, with a combined score of 57.8, which was down a tenth of a point from November and 0.6 points from October. December’s score is more than three points higher than December 2019.

“It now appears that the movement has slowed and what we are seeing now could be considered normal or at least some version of normal,” Chris Kuehl, Ph.D., an economist for the NACM, said.

Sales drove the improvement in the favorable factors, jumping from 66.5 to 70.2 in December. New credit applications increased half a point to 64.4 as did amount of credit extended (64.8 to 65.3) in December. Dollar collections inched forward two-tenths of a point to 62.8 in the latest CMI. The combined four favorable factors index improved to 65.7 in December from 64.4 the previous month.

The combined six unfavorable factors index slipped one point in December to 52.5. Disputes was the only unfavorable factor to improve, rising from 50.6 to 51.2, yet all six factors remained in expansion territory with scores above 50 for a second month in a row. Rejections of credit applications fell two-tenths of a point to 51.3 as did dollar amount of customer deductions from 51.7 to 51.5 in December. Accounts placed for collection dropped from 56.2 to 51.6, and dollar amount beyond terms slipped from 58.1 to 57. Filings for bankruptcies dipped a half point to 52.5.

The manufacturing sector experienced some leaps in the favorables. New credit applications increased from 62.4 to 70.2 in December, and dollar collections and amount of credit extended each jumped more than three points. Dollar collections came in at 65.9 compared with 62.3, while amount of credit extended was at 66.8 compared with 62.6. Sales went from 69.9 in November to 71.1 in December to round out the favorable index at 68.5 for the month, up from 64.3 in November.

The unfavorable factors caused some trouble for credit professionals, with a huge drop in accounts placed for collection, which went from 63 in November to 51.4 in December. Rejections of credit applications declined to 51.3 from 52.5, and dollar amount beyond terms sank to 53.5 from 58.9. Disputes climbed out of contraction territory at 49.8 to land at 50.7 in December. Dollar amount of customer deductions slipped from 51 to 50.6 in December, and filings for bankruptcies dropped from 53.7 to 52.8. The overall manufacturing index declined two-tenths of a point in December to sit at 58.4.

The service sector remained relatively unchanged, with an overall score of 57.1 compared with 57.2 in November. Sales increased from 63.1 to 69.3, but new credit applications, dollar collections and amount of credit extended fell. New credit applications declined from 65.4 to 58.7, and dollar collections dipped under 60 as well at 59.7 compared with 62.9 in November. Amount of credit extended fell to 63.9 after a showing of 67 in November. Four of the six unfavorables experienced an improvement in December. Rejections of credit applications went from 50.4 to 51.2, while accounts placed for collection emerged from contraction territory at 51.8 compared with 49.4. Disputes improved slightly from 51.4 to 51.7, and dollar amount beyond terms shot up to 60.6 from 57.4. Dollar amount of customer deductions was unchanged at 52.4, but filings for bankruptcies declined two-tenths of a point to 52.2.

“The stability that has been noted over the last few months was shaken a little by the resumption of lockdowns, but thus far, this impact has not shaken the index off a course that puts it solidly in the expansion zone,” Kuehl said.