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The Credit Manager's Index (CMI) rose 0.5% in June to 57.8%, continuing to paint a picture of reasonably strong economic growth. The increase was driven by the service sector, whose 1.3% increase overcame the 0.2% fall the manufacturing sector suffered. Although the manufacturing sector remains in positive territory at 57.3%, it has fallen for two consecutive months and remains 2.6% below last June's level. Dollar collections and accounts placed for collection both fell. Each remains significantly below last year's levels and, like last month, suggest that free cash flow remains a problem in the manufacturing sector, especially in the auto industry. Conversely, eight out of ten components in the service sector rose, led by a 5.6% improvement in bankruptcies, wiping out last month's loss. Overall, the index rose 0.5% to 57.8%, mirroring the macroeconomy's state of reasonably strong growth, and perhaps a rebound from last month's "soft patch." Nonetheless, continued interest rate hikes, a return to sharply rising energy prices, and weakness in Europe all represent significant headwinds.
Manufacturing Sector Results
The Manufacturing CMI remained virtually unchanged for June 2005, finishing at 57.3 percent, or 20 basis points down from May 2005. Lower dollar collections ...
Source: HighBeam Research, NACM Credit Manager's Index: report for June 2005.(National...