The June Credit Managers’ Index (CMI) from the National Association of Credit Management contained more good news this month, building on the positive growth of May's banner figures.
The June combined CMI numbers continued to trend in the right direction, with the reading now as high as it has been since the recession started to drag the whole economy down. The index of favorable factors dipped a little from the reading last month, but still remained in the 60+ category, which is still higher than it has been any month other than May. This bodes very well for the future, as does the sales category, which remained well above 60 despite slipping slightly.
Amount of credit extended experienced a minor drop, but continued to be perhaps the steadiest of the favorable categories, as the range has been pretty narrow over the last year; every month has seen readings in the 60s.
"The credit industry is one of those harbinger sectors," said NACM Economist Chris Kuehl, PhD in the report. "Movement in the economy is heralded by movement in credit—positively and negatively. In the early days of the recession, the collapse in credit signaled what was to come as the CMI was plunging into the 40s and 30s before the rest of the economy really knew what had hit it. Now there is solid multi-month evidence of a resurging credit sector and that will likely lead to more overall economic progress."
Other improvements in this month's CMI came in the unfavorable factors, particularly in rejections of credit applications and a 21-month high water mark for accounts placed for collection.
A full copy of this month's report can be found here.