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Credit Manager’s Index Shows Loosening of Trade Credit

The latest Credit Manager’s Index for January has been released and there are some truly encouraging indicators showing up this month – most notably in the area of credit availability.

The most encouraging of the sub-sectors this month indicates the amount of credit which is beeing extended. The jump from 61.7 to 64.8 is very significant as this the signal that many have been waiting to see.  Over the last few months there have been indications that business activity has started to pick up and this has been reflected in the CMI by increases in sales and an increase in new credit applications. In the last month both of these indicators have slowed a little while still remaining robust. Sales dropped from 65.9 to 63.5 and that is still very respectable given that the holiday season has been completed.  The rate of new credit application slowed from 60.1 to 58.6 but that is also somewhat attributable to the arrival of a generally slow time of year as compared to the last quarter.

The trends that manifest in the overall score are emphasized in the manufacturing sector. The jump in amount of credit extended was truly impressive – from 61.6 to 66.2. That marks the highest point for credit extended since 2007 and takes the manufacturing sector to pre‐recession levels as far as credit access is concerned.   Source:  National Association of Credit Management

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