NACM credit manager's index: report for July 2007.(CREDIT MANAGER'S INDEX)(National Association of Credit Management)

The seasonally adjusted Credit Manager's Index (CMI) fell 1.2% in July, the first decline in four months. While the drop-off was not dramatic, it was widespread as eight of the 10 components fell. "The housing market was once again a major drag on the respondents' businesses," said Dan North, chief economist with credit insurer Euler Hermes ACI, "and there appears to be little relief in sight as homebuilders continue to report bleak conditions." North said that housing starts, permits and unit sales are all down dramatically from last year while the supply of unsold homes is growing. "And large homebuilding firms are reporting losses and forecasting continued weakness," he noted. "However, commercial construction activity remains strong." Even though the report shows signs of erosion this month, North noted that 29 of the 30 total components are still above the 50 level, indicating economic expansion.

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The manufacturing sector dropped 1.7% on a seasonally adjusted basis as seven of the 10 components of the index fell. "Sharp declines in the accounts placed for collections and dollar amounts beyond terms components accounted for much of the drop, suggesting cash flow difficulties" said North. Indeed, one respondent reported that "... customers are disputing more and slowing payments ..." while another noted "... everyone is ... taking longer terms without approval."

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The service sector fell 0.7% on a seasonally adjusted basis as five of 10 ...