The Credit Managers’ Index from the National Association of Credit Management continued to slide in April as the coronavirus outbreak impacts spread across the U.S.

To say the Credit Managers’ Index (CMI) from NACM is “down in the dumps” is an understatement, yet there are still a few positives in April’s CMI. While not bottoming out at the record low seen during the Great Recession, the current combined score of 40.6 is uncomfortably low. January 2009 is the CMI’s all-time low with a score of 39.7.

“There has been nothing natural about this global economic collapse as it was not triggered by any sort of economic issue as had been the case with the 2008 recession or any of the other downturns the world has faced in the last several decades,” said NACM Economist Chris Kuehl, Ph.D. “The decision to shutter the entire business community in order to deal with a pandemic is creating a crisis that has never existed before and that leaves business with few options other than to simply hang on.”

After a 7.2-point drop in March, before much of the coronavirus impacts were registered in the U.S., April declined even further—8.3 points. Similar to March, most of the drastic declines were seen in the favorable factors, which dropped 14.5 points in April. After only a 1.6-point slip in March, the unfavorable factors sank 4.3 points in April.

The large drop in favorables was again due to sales tumbling to a score of 20 from 39.5 in March. New credit applications and dollar collections continued their fall into the 30s. A score below 50 is considered contraction territory. The amount of credit extended was the best-performing favorable factor, but it slipped from the low 50s to the low 40s.

“The data from the unfavorable categories has been weak, but not quite as catastrophic as is the case with the favorables, and this is simply due to timing,” Kuehl said. “This crisis is still fairly young as it began in earnest in March. There has not yet been time for all the negatives to manifest, but they have started to and will become more evident in future readings.” Rejections of credit applications, disputes and filings for bankruptcies each declined in March, but all three stayed in expansion territory (score above 50). Elsewhere in the unfavorables, accounts placed for collection and dollar amount of customer deductions both fell but are near the 50 threshold. However, dollar amount beyond terms plunged more than 16 points and is now about half the score it was in February.

The manufacturing sector followed suit—a rough showing in the favorables that was mainly dragged down by sales. All four factors fell further into contraction, with the overall favorable decline at 13.9 points to 34.3. The unfavorables, however, were a different story with five of the six still in expansion territory despite declines. Kuehl said this will change in the next CMI. Dollar amount beyond terms hit 28.6 after falling about 10 points in March.

It was much of the same in the service sector with sales’ staggering drop of more than 20 points in April to 18.6. Dollar collections and amount of credit extended each dropped into the 30s, while new credit applications declined to the mid-20s. On the unfavorables side, rejections of credit applications actually improved, albeit by a tenth of a point. “The fact is that only a very few companies are in a position to even asking for credit, and they are generally in sectors that have been deemed essential,” Kuehl said. Disputes was the only other unfavorable to remain above 50.

“It is more than obvious that these are conditions we have never seen,” Kuehl said. “This is an imposed recession—a response to the need to control a pandemic. The lockdown is supposed to start easing this month but the pattern is still unknown. Each of the 50 states will decide what that pace and process will be, and that will likely delay a recovery of the economy as a whole.”

For a complete breakdown of the manufacturing and service sector data and graphics, view the April 2020 report here.