Magazine article Business Credit

Report for September 2011

Magazine article Business Credit

Report for September 2011

Article excerpt

Are there rays of hope coming from the Credit Managers' Index (CMI)? It would certainly seem that way after looking at the September performance. "For the past few months, there was a slow deterioration of key credit conditions and many were expecting to see more declines this month," said Chris Kuehl, PhD, economist for the National Association of Credit Management (NACM). Instead, the combined index returned to the levels set in July. Granted, the index had been higher than recent readings since October of last year, but moving from 52.7 to 53.8 is not insignificant and it brings the combined index back to levels seen in the spring months."

The better news is in the breakdown of favorable and unfavorable factors. The recovery in favorable factors takes the index back to May's levels and the lift was impressive--improving from 58.1 to 59.9. The index was last at 60 this past April. That gain was driven in no small part by additional sales, which moved solidly past 60 to 61.4 and is at the highest point since April. There were corresponding solid index numbers in new credit applications, dollar collections and the amount of credit extended. These are all very good signs for future development and suggest that in the midst of all the gloom and doom provoked by political wrangling, there is business taking place and growth manifesting itself.

There were encouraging signs in unfavorable factors as well. The majority of the readings remain below 50, still signaling weakness, but the combined score moved up slightly from 49. …

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