NACM Credit Manager's Index: report for September 2008.(CMI)

When credit managers sent their responses in this month, they also sent along a message: "Welcome to the recession." The seasonally adjusted Credit Manager's Index (CMI) plummeted a record 3.3% to reach a historic low of 47.4, clearly indicating economic contraction. The survey resulted in numerous other negative records. All 10 components of the Combined Index fell, leaving eight below 50 and seven at record lows. The manufacturing index fell 2.5 to a record low of 47.9 as seven components fell, leaving a record seven components below 50 and three at their lowest levels ever. In the service sector, the index fell 4.2 to a record low of 46.8 as a record all 10 components fell, leaving a record eight below 50, and three of the components at their lowest levels ever. Sales were particularly hard hit in both manufacturing and service sectors, falling 12.2 and 10.1 respectively, both to historical lows and both below 50.

"While the economy has been deteriorating since the end of last year, its rate of decline is clearly increasing," said Daniel North, chief economist for credit insurer Euler Hermes ACI, who analyzes the data and prepares the CMI report for the National Association of Credit Management. "The combined weight of high energy prices and a ruined housing market is now being compounded by the ever-worsening conditions in the credit markets," he said. "In response, the Fed has cut interest rates and pumped hundreds of billions into the banking system, but no one will lend for fear that the financial system is on the verge of a meltdown. The credit markets need a big shot of confidence to be unclogged, or credit managers will become increasingly gloomy."

The seasonally adjusted manufacturing sector index fell ...