The Credit Managers’ Index (CMI) from the National Association of Credit Management (NACM) for May, now available at www.nacm.org, arrived bearing very positive news: an index level not seen since last summer. And the improvement becomes even more convincing upon further review of the data, in part because of better consumer confidence numbers and the general enthusiasm greeting the latest housing data.
Favorable factors across the board rebounded to their best levels of this calendar year, with the all-important sales category posting its best performance in more than 12 months. Additionally, not since before the recession has the number for amount of credit extended been so high.
“If the willingness to extend credit is surging at this pace, there will be some lofty expectations for the months to come,” said NACM Economist Chris Kuehl, PhD. “There would be good reason to question data this optimistic except for the good news percolating in the ranks of the consumer sector, and it is reasonable to assume that this CMI number reflects some of that.”
The data from the unfavorable factors is also encouraging and further reinforces the notion that a real rebound is underway. The jump was not quite as spectacular as with the favorable factors, but if the past is prologue there will likely be an even bigger response in next month’s data. Dollar amount beyond terms made the most solid gain, jumping to its highest level seen in well over two years. Said Kuehl, “Creditors are clearly getting caught up in a variety of economic sectors.” He added that the latest CMI, in long-overdue fashion, may just be foreshadowing even better days ahead, a pleasant shift from the usual warnings and caveats that have following news of positive momentum in the recent past.