Late 2011 gains carried enough momentum to push the January Credit Managers' Index to 54.8, usurping the December index of 54.4, which was the highest point since May, according to a news release from the National Association of Credit Management.
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. Any index number greater than 50 indicates growth.
The NACM report touted the month's sales reading, 63.5, which bypassed December's 60.5 reading. The January reading, the best sales performance since April, is flat compared to January 2010, a sign of encouragement, according to the NACM. The sales figure followed a similar trend last year and held in the 60s until May, when it dropped.
“The next few months will bear watching to see if this sales trend is repeated and sustained longer than it was in 2011,” NACM economist Chris Kuehl said in the release.
Another positive indicator was new credit applications, which reached 61.9. According to the release, this reading hasn't exceeded 60 since February 2011, when it was 60.3.
“The jump from December was nothing short of spectacular as the previous reading was only 55.3,” Kuehl said in the release. “The trend toward more credit applications suggests a lot of new activity."
The most negative trend, NACM noted, was a drop in dollar collections to 56.8 from 61.4 in December.[[In-content Ad]]
