A survey of rural bankers in 10 Midwest and Plains states suggests the rural economy will remain weak in the months ahead despite the strength of farming.
The overall Rural Mainstreet index remained in negative territory in September but increased slightly to 47.6 from August’s 46, according to the report released Thursday. Any score below 50 suggests the economy will contract over the next six months.
“While the farm sector is experiencing healthy growth, Rural Mainstreet businesses continue to report waning economic fortunes,” Creighton University economist Ernie Goss said.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed for the report.
Goss and Bill McQuillan, chief executive of CNB Community Bank of Greeley, Neb. oversee the survey.
The farmland price index grew to 57.7 in September from August’s 55.3.
“The general economy is still struggling, but the crop and livestock producers are looking at an exceptional year,” said Kathy Thuman, president of Farmers State Bank in Maywood, Neb.
The farm equipment sales index increased to 56.2 in September from August’s 52.7 and the September hiring index ticked higher to 46 from 45.9 in August.
However, the retail sales index remained weak at 45.2 in September, though that figure is better than August’s 40.2.
The home sales index increased to 47.6 in September from August’s 38.8.
But the bankers are optimistic about the economy. The confidence index, which reflects bankers’ expectations for the next six months, jumped to 54.9 in September from August’s 46.
All three bank indicators – loan volumes, checking deposits and CDs – were at or above 50 for a seventh straight month.