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CMI finally showing significant improvement

COLUMBIA, Md. — The combined Credit Managers’ Index (CMI) of the National Association of Credit Management for September rose to 49.8, bouncing back from a nearly stagnant August on the strength of some dramatic improvements in dollar collections and in reductions in accounts placed for collection and dollar amount beyond terms.

September saw the biggest improvement in these sectors in almost a year. Throughout the last year, the most distressing numbers seemed to be in these categories, which is expected in the middle of a recession. Even companies surviving the downturn were likely falling behind in bills or choosing to delay payments in an attempt to preserve cash flow. Now there is some sense that customers are starting to catch up and get current with their creditors. 

The rate of dollar collections has not been this positive since Sept. 2008, just as the economy started to seriously bottom out. The number of accounts placed for collection has declined and is lower than any point since last summer. Dollar exposure is also the lowest since summer 2008. These index readings suggest that there is a marked improvement in credit performance.

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