Credit managers index shows steady growth

The credit managers index grew in April for the 12th consecutive month, signaling continued increases in confidence.

The index, from the National Association of Credit Managers, hit 56.5 in April, up from 55.7 in March and 43.9 in April 2009. A number of 50 or more indicates that the economy is expanding.

Nearly all factors improved in April compared to March, including increased sales and decreased credit rejections and business bankruptcy filings. New credit applications and the amount of credit extended held basically steady.

The decline in bankruptcies "is partly attributable to the fact that the weakest companies have already been forced out, but there is also a strong trend, suggesting companies are starting to get enough cash flow to survive,” NACM Economic Analyst Chris Kuehl said in the report. “But there is still a challenge in terms of getting financing, which is reflected in the CMI data in amount of credit extended.”

The report added that the overall economy is basically in a holding pattern, as the unemployment rate has not started to decline and significant economic growth is just beginning.