The Creighton University Rural Mainstreet Index (RMI) fell for the sixth time in the past seven months, sinking below growth neutral for a fifth consecutive month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The region’s overall reading for October once again sank below growth neutral to 44.2 from 46.3 in September. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral. This was the fifth consecutive month the overall reading has fallen below growth neutral.
“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Almost one in four bankers, or 23.1%, reported that the economy was already in a recession,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Farm equipment sales: For the second time in the past three months, the farm equipment-sales index slumped below growth neutral to 47.8 from September’s 58.0. The index has risen above growth neutral for 21 of the last 23 months.
Farming and ranching: The region’s farmland price index for October declined to 58.0 from September’s 61.1 but moved above growth neutral for 25 straight months.
Banking: The October loan volume index dropped to a still strong 76.8 from 79.5 in September. The checking-deposit index fell to 34.0 from September’s 46.3, while the index for certificates of deposit and other savings instruments rose to 46.2 from 34.6 in September. “Higher farm input costs and drought conditions in portions of the region supported stronger borrowing from farmers,” said Goss.
Confidence: The slowing economy, strong energy prices, higher borrowing costs and elevated agriculture input costs pushed the business confidence index down to 30.8 from 40.7 in September. “This is the lowest reading for the confidence index since May 2020,” said Goss.
The survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index covering 10 regional states, approximately 200 rural communities with an average population of 1,300. The index provides the most current real-time analysis of the rural economy.
Source: Creighton University