Since falling to a record low in April of this year, the Creighton University Rural Mainstreet Index has increased for six straight months. The index rose to its highest level since January, prior to the onset of COVID-19.
The overall index for October climbed above growth neutral 50.0 to 53.2 from September’s 46.9. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
The October farm equipment-sales index increased to 37.9 from 32.1 in September. Bank CEOs estimated that farm equipment sales will fall by an additional 3.1 percent over the next 12 months.
“Recent improvements in agriculture commodity prices, federal farm support, and the Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, more than one-third, or 35.5 percent, of bank CEOs reported their local economies were experiencing recessionary economic conditions,” said Ernie Goss, PhD, chair in regional economics at Creighton University.
The confidence index, which reflects bank CEO expectations for the economy six months out, improved to 51.6 from September’s 50.0.
“COVID-19 related farm support payments and improving grain prices have boosted confidence offsetting pessimism from the impact of the pandemic,” said Goss.
This month, bankers were asked to identify the industry in their area most harmed by the pandemic. More than eight of 10 named restaurants/bars as experiencing the greatest negative impacts from COVID-19. Others areas identified by bankers as economically impacted were: farmers (3 percent), medical care (3.4 percent), retailers (6.3 percent), and hourly workers (6.7 percent).
Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.