ARM Economic Index Increases Moderately in 2006

The Kaulkin Ginsberg Index (KGI), the leading indicator of economic conditions affecting the accounts receivable management (ARM) industry, has increased 4.7% to 1317.4 over the course of 2006.  While the KGI is down 10.5% from its all-time high of 1472.7, the annual increase is attributed to significant movement in each of the index’s seven variables that took place throughout 2006.

The KGI’s two distinct fluctuations took place first following NCO Group’s spring announcement of its plans to go private and, later, after the completion of the merger and subsequent delisting in November 2006.  The total market capitalization of publicly traded ARM companies is one of the seven macroeconomic variables that contribute to the KGI.   

In addition, the more than fourfold increase in bankruptcy filings in 2006 impacted the KGI significantly throughout 2006.  Fluctuations in the number of bankruptcy filings were caused by the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in October 2005.  Following a surge in filings prior to BAPCPA’s effective date, first quarter 2006 filings dropped to historic lows but proceeded to rise throughout the year. 

“Notwithstanding the volatility of the Index in 2006, the KGI presently signals favorable economic prospects for ARM companies in the coming year,” said Michael Klozotsky, a Kaulkin Ginsberg Research Associate.

For more information about the Kaulkin Ginsberg Index, see www.kaulkin.com/research/kgi or call Michael Klozotsky at 301-907-0840 ext. 123.

Editor’s Note: Kaulkin Ginsberg Company is the parent company of Kaulkin Media and insideARM.com.