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The seasonally adjusted Credit Manager's Index for December fell 2.1 points from November to 40.1, marking the fourth consecutive record low for the index, according to a report by the National Association of Credit Management. The index, a gauge of economic factors affecting credit and collection professionals, was down 12.3 points from 52.4 in December 2007. Any score below 50 indicates economic deterioration. The index consists of four favorable factors, such as the amount of credit extended, and six unfavorable factors, such as bankruptcy filings. All 10 factors are below 50, with six falling to record lows, according to the report. The index provides a benchmarking and forecasting tool based on the entire cycle of business transactions from sales to collections. "Credit managers delineated in nauseating detail the business conditions of an economy which has lost almost 2 million jobs in the last year and one whose prospects are dismal," Daniel North, chief economist for credit insurer Euler Hermes ACI, said in the report. "Deteriorating sales and payment patterns are the credit managers' main complaints, and those complaints are likely to strain cash flow and put businesses at risk."
