Columbia, Maryland: July 31, 2014â€”The Credit Managers' Index (CMI) from the National Association of Credit Management (NACM) improved to 56.8 from 56.1 in July. The readings for the favorable and unfavorable factor indices improved, from 62.4 to 63.7 for the favorable factor index, marking the highest point in over four years, and from 52.0 to 52.2 for the unfavorable factor index. The latter being below marks set earlier in the year, but is at least trending in the preferred direction.
"The overall sense is that real progress in economic recovery is being made and the future looks brighter," said NACM Economist Chris Kuehl, PhD about the July CMI report. "But, not to rain on the parade, these numbers also looked good at the start of the year, and it has taken until mid-summer to regain that momentum." Winter weather was partly responsible for this struggle, as was the significant decline in exports of American goods, Kuehl noted. "The rebound in exports played a major role in getting the US back to growth, but the caution is that many of those importing nations are still not in very good economic shape," he said.
Significant readings within the favorable factors promise better days ahead. Sales improved from 63.9 to 65.2, back to the level set in May. "The sales reading has been strong for some months and that bodes well as sales will underpin any kind of real progress in the months to come," Kuehl said. New credit applications improved from 61.5 to 62.4, the second straight month above 60 and at a yearly high. Dollar collections got back on track and crested above 60 again, moving from 59.3 to 61.0. Finally, amount of credit extended jumped dramatically from 64.8 to 66.1. "This is the highest reading since the recession and suggests far more credit access than before," Kuehl said. "This tracks with the data that comes from the Federal Reserve on bank lending in general and that is very solid news for the economy as a whole."