Cortera's October Supply Chain Index (SCI) report indicates the slowing of payments and related cash flow throughout the overall supply chain, reversing four consecutive months of improving conditions. While the exact cause of the shift remains in question, it could represent an early arrival of a similar seasonal pattern seen over the past couple of years (2007 and 2008), as manufacturers, suppliers and retailers take on additional trade-credit-related debt in advance of the critical holiday shopping season. Overall, the index remains 40 percent higher than pre-recession levels.

The SCI is a monthly index of accounts receivable activities covering manufacturers, distributors and wholesalers, retailers, services, and transportation companies. It measures payment activities of approximately 350,000 businesses.

"An abrupt slowing of payments and cash flow throughout the supply chain typically indicates a waning confidence in sales," says Jim Swift, president and CEO, Cortera. "But we've seen similar spikes occur in the past, as supply chain stakeholders make significant upfront investments in preparation for the holiday shopping season. What makes this one potentially puzzling is the timing. We're either looking at the impact of businesses stretching out such debt over a longer period of time or confidence in the strength of a recovery has dropped over the past month." The November report, due out the first week of December, will go a long way toward answering these questions, he says.

A two-year view of SCI data is available at http://www.cortera.com.

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