Magazine article Business Credit

Report for March 2012

Magazine article Business Credit

Report for March 2012

Article excerpt

The Credit Managers' Index (CMI) for March trended in a positive direction and is yet more reinforcement for the notion that the economy is doing better and that the recovery may be real. The combined index is now at the highest level seen in well over a year, even if the 56.2 reading is lackluster compared to the boom years of the last decade that featured index numbers well into the mid-60s and occasionally in the 70s.

The good news this month stems from an improvement in unfavorable factors, while favorable factors held their own. Sales, dollar collections and amount of credit extended all dipped a little, but stayed above 60. In fact, all favorable factors remained above 60. The more significant shifts took place in unfavorable factors. For the first time in more than a year, all unfavorable factors were over 50 and the combined total was a solid 52. The biggest jumps took place in the more sensitive indicators-accounts placed for collection moved from 50.9 to 52 and disputes moved from 49.7 to 50.9. Disputes have not been out of the 40s since July of last year and even that was only for one month. Dollar amount of customer deductions went from 48.5 to 51.1, which is only the third time it has been above 50 in the last year. Overall, the index of unfavorable factors reached the highest level in over a year. In the last four months, the numbers have been rising from the contractionary levels set last year. In November the index broke 50 by the barest of margins. Since then, the index has crept up in increments--50.4 in December, 50. …

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