Rural Mainstreet Economy Fell to 2024 Low
For a 12th straight month, the overall Rural Mainstreet Index (RMI) sank below growth neutral, according to the August 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 August sank to 40.9 from 41.3 in July. It was the lowest reading since November of last year. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“Weak agriculture commodity prices, sinking agriculture equipment sales and declining farm exports pushed the overall reading below growth neutral for the 12th straight month,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
This month, bankers were asked to compare the current business environment in their area to that prior to Covid-19. Approximately 22.8% reported business conditions were worse while 18.2% indicated business conditions were improved compared to pre-Covid. The remaining 59.0% indicated conditions had barely changed.
Farm equipment sales: The farm equipment sales index for August slumped to 16.7, its lowest level since January 2017, and down from July’s 19.0. “This is the 13th straight month that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weak grain prices are having a negative impact on the purchases of farm equipment,” said Goss.
Farming and ranching land prices: For the third time in the past four months, farmland prices sank. The region’s farmland index fell to 45.5 from Julys 52.2. “Only 9.1% of bank CEOs reported that farmland prices expanded from July levels,” said Goss.
Source: Creighton.edu