Industry that has direct knowledge of consumer liquidity expresses optimism for economic rebound
ROCKVILLE, MD: November 5, 2009 – U.S. collection agencies reported an improved outlook for performance in the next six months, according to a survey released on insideARM.com, a leading news and information website for the Accounts Receivable Management industry (ARM).
The new ARM Confidence Index uses data from insideARM.com’s quarterly Credit and Debt Collection Industry Confidence Survey to create a snapshot of how accounts receivable management firms see financial performance in the next six months, based on current conditions. The Index provides a measure of industry confidence on a scale of 0 to 100 and is calculated using data from responses to the Confidence Survey; including prior quarter performance rating, current performance rating, future performance expectations, and anticipated staffing moves.
The Index increased from 58.4 in the summer survey to 63.1 in the latest survey results, taken in the last two weeks of October.
“The debt collection industry has an immediate sense of consumer liquidity,” said Patrick Lunsford, Senior Editor at insideARM.com. “When consumers begin to feel comfortable about their financial footing, they begin to pay down their debts. In this context, ARM industry performance can provide an early indicator of economic recovery.”
The Index reading for fall 2009 recovered to nearly the same level as fall 2008, the Index’s highest reading. But the similar readings were achieved in vastly different ways.
“The fall 2008 reading was almost entirely performance-driven,” said Lunsford. “Collection agencies were still performing well in the third quarter of 2008. But by the time the survey was taken (October 2008), the bottom had fallen out of the financial sector. In contrast, performance is still muted today for collectors as unemployment remains high. But the forward-looking confidence readings were at an all-time high in the latest survey.”
Additional highlights from the survey provide further indications that ARM firms are optimistic about the future. Nearly 30 percent (29.0) indicated they had to lay off workers in Q309, but only 11 percent reported planning further staff reductions for the remainder of the year, and the outlook is better looking ahead to six months from now. A majority (55.1 percent) said they expect to increase their staff from current levels by mid-year 2010.
The complete results of the Credit & Debt Collection Industry Confidence Survey, Fall 2009, including responses from debt buyers, creditors, and technology vendors to the ARM industry, are available online at: http://www.insidearm.com/go/confidence-survey/fall09.
Contact
Patrick Lunsford,Senior Editor, insideARM.com
240-499-3828