NACM Credit Manager's Index: report for June 2007.(CREDIT MANAGER'S INDEX)(Report)

Combined Sectors

The seasonally adjusted Credit Manager's Index (CMI) rose a modest 0.5% in June as a 1.1% increase in the manufacturing sector offset a 0.2% decrease in the service sector. Results throughout the survey showed mostly small changes from the previous month. "The decimated housing market once again weighed heavily on suppliers of building materials in the service industry" said Dan North, chief economist with credit insurer Euler Hermes ACI. "This condition seems likely to continue, given an increasing supply of homes for sale, sharp declines in housing permits and starts and the unprecedented fall of median year-over-year house prices for 10 consecutive months. Somewhat surprisingly, the manufacturing sector continues to expand on the back of an economy which continues to grow, albeit slowly." Overall the report was moderately positive, reflecting the state of the economy as a whole.

[GRAPHIC OMITTED]

Manufacturing Sector

The manufacturing sector rose 1.1%, chiefly as a result of improvements in sales and bankruptcies. Indeed, one respondent noted that they "have had no customer bankruptcy ..." and "... no ... collections." "However" said North, "it is important to note that the data was mixed as only six of the 10 components rose, and that comments from respondents were somewhat more inconsistent than usual, indicating lack of a definitive consensus ...