Columbia, MD (PRWEB) November 27, 2013
The Credit Managers’ Index (CMI), published by the National Association of Credit Management (NACM), increased to 57.1 in November, registering its highest reading since the beginning of the recession in 2008.
Building on the optimism from October’s CMI, where respondents shook off the crisis in Washington to deliver the index’s best figures in over a year and a half, November’s readings signify a newfound stability in businesses’ attitudes on the economy as well as a greater sense of security in their investments. “There is a real sense that credit is more available than it has been in some time, which bodes well for the coming year,” said NACM Economist Chris Kuehl, PhD. “This is not to say that a shock to the economy would not force a decline, but more resilience has formed than has been the case in some time.”
Sales climbed to 63.4 in November, besting May’s record high of 63.0. Other favorable factors, however, fell victim to some slight seasonal shifts as new credit applications improved to 59.1, but amount of credit extended declined slightly from 63.8 to 63.2. “Given that there was more credit requested and less granted, the sense is this may be a short-term retrenchment slated to reverse once the holiday season distortions run their course,” Kuehl said. Dollar collections also slipped in November, from 61.4 to a still-strong 59.7, “reflecting some of the cash flow management tricks that emerge this time of year,” he added. Nonetheless, even with the divergences between individual favorable factors, the favorable index itself suffered only a slight decline from 61.5 to 61.3, which Kuehl noted wasn’t any cause for concern.
The unfavorable index, however, experienced a noteworthy bump from 53.6 to 54.3 in November, ignoring any uncertainty about the economy and signaling that most of the companies that received credit in the past are managing to keep pace. Rejections of credit applications jumped by more than a point, from 52.1 to 52.3, and accounts placed for collection leapt by nearly two points from 53.3 to 55.0, an impressive development given that this factor hit the 40s in March.
“The overall message from the unfavorable factors is that business does not seem to be in real distress at the moment,” Kuehl said. “This does not necessarily mean that there is solid growth around the corner, but it does indicate that most of the companies in the survey are heading into 2014 stable, which opens up the possibility of substantial growth.”
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