Credit Managers' Index continues improvement in November

The holiday season seems to be bringing with it a more positive outlook in the business community, according to the November Credit Managers' Index released Tuesday.

The overall index increased to 55 in November, up from 51.1 in October and from 34.4 in November 2008. Any index number greater than 50 indicates growth.

The index, from the National Association of Credit Management, notes reports that sales are beginning to increase, along with increases in new credit applications and dollar collections. The new application index rose to 55.4 from 52.7 the month before, while the dollar collections index is up to 55.8 from 54.7 in October.

The index also shows improvements in the "non-favorable" category, which includes disputes, credit application rejections and accounts placed for collection.

"As sales increase and credit applications are granted, there is a sense that more (businesses are) optimistic about the coming year than not," NACM economist Chris Kuehl said in a news release. "Business confidence is improving and the CMI provides a clue as to why."

Considerable growth was noted in manufacturing, where the index increased to 54.9 due to increased sales and credit applications in the sector, and in services, where an increase in collections pushed the index up to 58.6.

The major impediment to future growth, according to Kuehl, is the credit market.

"Access to credit remains a limiting factor for many businesses, but there is evidence of the logjam loosening," Kuehl said in the release. "In conversations with credit managers and through the comments sent along with the survey, there is a sense that there are growing opportunities for the best customers and a willingness to get engaged with those showing a plan and some progress."

The CMI is created based on a monthly survey of credit and collection professionals, who are asked to rate favorable and unfavorable factors in their monthly business cycle.[[In-content Ad]]