Collection Industry Index Declines Nearly 4 Percent, A Reflection Of Continuing Economic Challenges

Rockville, MD – The Kaulkin Ginsberg Index (KGI), the leading indicator of economic conditions affecting the accounts receivables management (ARM) industry, continued its decline from the month prior. The updated February figure for the KGI shows the index fell 36.5 points from January to 1128.5 in February, a decline of 3.1%. The February adjusted figure also represented a year-over-year decline of 10.3%.

“To date the first quarter of 2009 has followed the downward trend seen throughout 2008 as unemployment, a major contributor to recovery performance, has continued to expand,” said Dimitri Michaud, consumer finance analyst for Kaulkin Ginsberg.

Of the seven contributing economic variables within the index, the February decline was driven by deteriorating macroeconomic conditions that led to higher unemployment, decreased value for the market capitalization of accounts receivable management (ARM) companies, and a decrease in outstanding consumer credit. Nationally unemployment increased 6.6%, while outstanding consumer credit declined by roughly $7 billion during the month of February.

Preliminary projections for the month of March show the KGI declining another 3.6 points to 1124.9 or 0.3% from the February period, and if maintain would represent a year-over-year decline of 9.6%. The March projections for the KGI show a deceleration of the downward trend witnessed thus far in 2009 due in part to the improvements in the value of public ARM companies.

Index Variables
Variable	February 2009*	Monthly Change	Quarterly Change*	Monthly Effect*
Unemployment Rate	8.1%	+6.6%	+12.5%	Down
Federal Funds Rate	0.22%	+46.7%	+37.5%	Up
Charge-off Rate**	1.89%	N/A	+26.0%	Up
Outstanding Consumer Credit	$2.564(T)	-0.3%	+0.1%	Down
Total Market Cap of ARM Stocks	$600(M)	-13.5%	-35.8%	Down
Bankruptcy Filings	288,315	+4.3%	-2.6%	Up
Consumer Price Index	212.2	+0.5%	+1.0%	Up

* See “How is the KGI Calculated,” http://www.kaulkin.com/go/kgi-methodology
** Revisions will be made available upon release of fourth quarter results.

For more information about the Kaulkin Ginsberg Index, see http://www.kaulkin.com/go/kgi or call Dimitri Michaud at 240-499-3840.

About Kaulkin Ginsberg
Kaulkin Ginsberg is the leading boardroom-level advisor to the Accounts Receivable Management Industry (ARM). Since 1991, credit and collection professionals, owners, and investors worldwide have relied on the company for the insight, access and information needed to make well-informed decisions. Value-add consulting and M&A services cover almost every stage of a company’s lifecycle, from strategic analysis to growth and exit strategies. Kaulkin Ginsberg’s media division -- publisher of insideARM.com -- is the leader in providing timely news and perspective on the recovery of debt in all industries. For more information, visit www.kaulkin.com.

 

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