NACM Credit Manager's index: report for April 2008.(National Association of Credit Management)

The seasonally adjusted combined Credit Manager's index rose slightly to 50.1, barely above the critical 50 level indicating economic expansion. The increase of 0.2% was a result of the manufacturing sector falling 0.8% while the service sector rose 1.2%. Five of the 10 components in the combined index fell, but six are below 50. Eight components fell in the manufacturing sector, leaving six below 50, the most ever. "However, the service sector showed a rebound in April, breaking a six-month streak of decreases, which made it only the second month in the past 11 to show improvement," commented Daniel North, chief economist with credit insurer Euler Hermes ACI. "Finally, note the respective levels of the combined, manufacturing and service indexes--50.1, 50.2 and 50.0--all perilously close to showing economic contraction," he continued.

North said that comments from participants this month include the usual litany of slow paying customers and overall economic weakness, especially in businesses exposed to the housing industry. "However, there was a significant increase in comments about the negative effects of higher input costs, especially fuel," he said. "No doubt the Federal Reserve will cite these inflationary pressures as a concern when it signals to the financial markets that the cycle of monetary easing is about to end."

The seasonally adjusted manufacturing sector index fell for the second consecutive month as eight of its 10 components slid. Comments North provided from ...