Cortera's March Supply Chain Index report, a monthly index measuring payment activities of approximately 350,000 businesses, showed a faster rate of payments and lower delinquencies. The March Index dropped to 7.65 days beyond terms, its lowest level and best reading since August 2008.
The improved reading, which historically has a strong relationship with confidence in future demand, comes on the heels of positive data on manufacturing activity and small and mid-sized manufacturer optimism.
"Payment behavior can been seen as a barometer of confidence in future sales and demand," says Jim Swift, president and CEO of Cortera. "And when payments between partners show this kind of improvement, it provides an indicator of overall optimism." It remains to be seen whether such optimism can be maintained, but it is clearly a positive development for businesses seeking what has been an elusive improvement in cash flow, he adds.
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