The Creighton University Rural Mainstreet Index (RMI) improved this month but falls far short of suggesting rural economies are robust.
According to the monthly survey of bank CEOs in rural areas of a 10-state, July’s reading represented the fourth straight month with a reading that indicated recessionary economic conditions.
The index for July climbed to 44.1 with 50 representing growth neutral. Still, the index is up from June’s 37.9 and April’s record low 12.1. The index ranges between 0 and 100.
“Farm commodity prices are down by 12.5 percent over the last 12 months. As a result, and despite the initiation of $16 billion in USDA farm support payments, only 6 percent of bankers reported their area economy had improved compared to June while 17.6 percent said economic conditions had worsened,” said Ernie Goss, PhD, who chairs regional economics program at Creighton University.
The July farm equipment-sales index increased to 34.4 from 32.8 in June.
The confidence index, which reflects bank CEO expectations for the economy six months out, improved slightly to 43.9 from June’s 43.8. “Weak agriculture commodity prices, retail sales, and layoffs have diminished economic confidence among bankers,” Goss said.
About 33.5 of bankers expect low commodity prices to be the greatest economic challenge over the next 12 months, the survey revealed.
Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming participate.