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CICM Index shows three-quarter declining trend for economic confidence

Press Release – 7 November 2016

Continued declining confidence in the manufacturing sector is the driving force behind three successive quarterly falls in overall economic confidence, according to the latest barometer from the credit services sector.

Manufacturing closed down 2.3 points to 54.9 in Q3’s results from the Credit Managers’ Index (CMI), which is run by Europe’s largest credit professional body the Chartered Institute of Credit Management and sponsored by trade credit risk management experts, Tinubu Square. This is the most prominent factor in the headline figure’s 0.8-point fall to 55.3 – a figure that has collapsed by 2.7 points throughout 2016.

In comparison the Services sector is more optimistic and remains broadly flat at 55.5; although it has also fallen in the first three quarters of 2016 by -2.3 points, most of which (2.2 points) came in Q1.

Further analysis of Q3’s results shows a divergence from some of the UK’s key economic indicators. Compared to 0.5% quarterly growth in GDP and a 2.3% increase in the FTSE All Share Index, the CMI has dropped by 1.4%.

Philip King, Chief Executive of the CICM, says the CMI’s contrast to the stock markets is uncharacteristic: “Since it began in 2010, the CMI has generally tracked the All Share’s peaks and troughs,” he says. “What the latest results highlight is the difference between today’s beneficial economic circumstances and an uncertain future.

“We are currently seeing a post-Brexit bounce with a falling pound and continued EU membership positively affecting exports,” Philip continues.

“The confidence of credit managers is clearly being impacted by uncertainty over future trade negotiations and the lack of clarity around the timing of Article 50. It will be interesting to see whether that confidence shifts in Q4 given the recent support announced for Nissan and the UK car industry.”

The survey also asked whether if a sudden contraction in the economy occurred, could credit managers respond quickly to the need to re-evaluate credit terms they had issued. A third (33%) stated they either had no process in place for this scenario, or it would be entirely manual. Asked about the volume and value of credit limit requests, following sterling’s current post-brexit vote decline, 30% have already had, or were expecting an increase in requests.

Mike Feldwick, Head of Tinubu Square UK, said: “Trade Credit Risk Management is a fine balancing act, and whilst current sterling performance is bringing benefits to some, uncertainty over the way Brexit will unfold, is making life for credit managers complicated. They should take the opportunity to ensure they have the systems and processes in place to respond quickly to what will no doubt be a challenging journey ahead, reducing the risks their business is exposed to.”

Overall, regional results are more positive than the headline Index with 10 out of the 12 regions displaying positive results. However, the centre of the UK’s economy, London, has contracted and its CMI figure of 50.2 is well below a 52-point benchmark. The East Midlands is the only other region below this level at 51.1. Three sectors feature below the benchmark; Oil and Gas is the most concerning at 41.9; basic resources closed at 49.0; and retail ended at 51.4

“The CMI is now showing a clear and declining trend that started pre- and is continuing post-Brexit,” Philip adds. “It is important to recognise that while key indicators and markets are reporting good figures, there is disparity with economic confidence from the perspective of credit professionals, those at the heart of assessing businesses’ cashflow.”

The CMI is a diffusion index, producing ‘scores’ of between one and 100 (typically in a range of 40 – 60). Ten equally weighted factors are included – three favourable and seven unfavourable – and the index is calculated on a simple average of the 10 factors.



For further press information, please contact:

Sean Feast, Alex Simmons or Tom Berger – Gravity Public Relations

T:0207 330 8810


About CICM:

The Chartered Institute of Credit Management (CICM) is Europe’s largest credit management organisation. The Institute was granted its Royal Charter on 1 January 2015. The trusted leader in expertise for all credit matters, it represents the profession across trade, consumer and export credit, and all credit-related services. Formed over 75 years ago, it is the only such organisation accredited by Ofqual and it offers a comprehensive range of services and bespoke solutions for the credit professional as well as services and advice for the wider business community, including the acclaimed CICM/BEIS Managing Cashflow Guides (

Linkedin: CICM Credit Community