“Hurricanes Katrina and Rita unmistakably left their marks on September’s Credit Manager’s Index (CMI). The rapid increase in economic activity shortly after a natural disaster is well documented, and these hurricanes are no exception,” says Dan North, Chief Economist with credit insurer Euler Hermes ACI. “In particular, data from the manufacturing sector show a significant spike in demand. Manufacturing sales and the amount of credit extended were both up sharply, suggesting that customers are scrambling to snatch up goods as quickly as possible. In the service sector, sales and new credit applications also suggest a significant jump in demand.”
“The only downside shown in the report,” says North, “was the worsening in bankruptcy conditions, which were probably aided by the impending change (Oct. 17) to more creditor-friendly bankruptcy laws.”
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