Economic Fluctuations Affect Printers

The Credit Manager's Index (CMI), mirrors developments in the overall U.S. economy. The February CMI showed a strong snap back from January's weakness, led by sharp gains in sales, new credit applications, and amount of credit extended.

Gains were solid in both the service and manufacturing sectors, with the latter benefiting the most. It was the first increase in the manufacturing sales component in five months, and only the second in eight months. Said Dan North, chief economist with credits insurer Euler Hermes ACI, "Data also indicates that while the economy is strong now, it is likely to weaken after the first quarter as the Fed's tightening takes hold. It takes about a year for Fed actions to work through the economy, so the effects of the tightening, which are reflected in the inverted yield curve, are only beginning to be felt."

The manufacturing sector saw modest growth in February 2006. Sparked by an increase in three of the four favorable factors, the overall CMI increased 180 basis points from 52.4 to 54.2 percent. Amount of credit extended displayed the highest level of growth-increasing 650 basis points; followed by new sales, which jumped from 52.9 to 58.8-a 590-point increase.

Source: National Association of Credit Management