Credit Managers’ Index October 2010

CMI

The Credit Managers’ Index (CMI) improved dramatically in October and for the best reasons. This month saw solid activity in favorable factors for both the manufacturing and service sectors. Sales returned to levels not seen since May and is now above 60 again. Sales had been dropping steadily all summer and had been as low as 57.2, a reading not seen since December 2009. The boost in this factor occurred in both sectors. At the same time, there was a small jump in the number of credit applications, reaching a level not seen since June. Additionally, the increase in credit applications was coupled with fewer rejected ones, which is a solid sign for the future. “The overall feeling is that credit is starting to loosen up again after the decline in the summer. Banks are getting a little more aggressive, but more importantly there is more credit being extended by companies seeking to capture more share from their consumers,” said Chris Kuehl, PhD, economic advisor for the National Association of Credit Management (NACM). The amount of credit extended is back to levels previously set in May and dollar collections, which had already started to improve in September to 60, is now up to 61.9. “It is good news when either of the sectors starts to move in a positive direction, but activity in the favorable category generally signals a bigger set of gains in the overall economy,” said Kuehl.

CMI for October 2010 (160)

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