NACM Credit Manager’s Index for August 2008

The seasonally adjusted Credit Manager’s Index has inched even closer to the neutral economic
expansion/contraction point of 50%, creeping down 0.2% to hover at 50.7%. The manufacturing sector index
slipped a full percentage point to 50.4%, as only four of its 10 components rose. The service sector index
fared better, gaining half a percentage point, rounding out at 51.0% as six of its 10 components rose. All
three indexes have six components at or below the 50% level.

“Overall, there were no dramatic changes from July’s report,” said Daniel North, chief economist for credit
insurer Euler Hermes ACI, who evaluates the data and prepares the report for the National Association of
Credit Management. “However, in both manufacturing and service, dollar collections and the dollar amount
beyond terms worsened,” he continued. “The data suggest that tough economic conditions are strangling
buyers’ cash flow. Buyers are stretching their payment terms beyond normal and even after that, it appears
that they still cannot pay their bills.”

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