NACM Credit Managers Index December 2007

The seasonally adjusted Credit Manager’s Index (CMI) fell for the fourth
consecutive month in December. The index lost 0.7%, and dropped to a record low
of 52.4%. Six of the 10 components fell, including a 4% drop in dollar
collections. Daniel North, chief economist with credit insurer Euler Hermes ACI,
said, “While the manufacturing index actually gained 0.8%, it was overshadowed
by a loss of 2.3% in the service index. The deterioration in the combined index
matches that of other major indicators in the macroeconomy, including
disappointing holiday sales, a weakening employment market, accelerating
declines in housing prices, downgrades of banks and insurers, plummeting
consumer confidence, and a rapid increase in delinquencies and defaults on many
types of credit. It would appear that trade credit managers are now encountering
the same difficulty found in other credit markets, that is, the inability of
debtors to pay bills due to insufficient cash flow.”

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