I can't tell for sure if this represents an improvement in water quality. It probably does, if what we're seeing is a decrease in overall numbers of single-celled algae or a decrease in numbers of bluegreens (cyanobacteria). What you're seeing could however be an algae "bust" cycle, which would mean temporary loss of available oxygen in the pond. I'm just now recently learning what this means. Does the water smell funny in any way?