The Creighton University Rural Mainstreet Index (RMI) for July rose above growth neutral for the month. The monthly survey of bank CEOs in 10 rural states indicated economic growth for July.
The July farm equipment-sales index increased to 37.9 from June’s 35.7.
Borrowing by farmers for July remained strong. The borrowing index slipped to 71.9 from June’s 72.6. Bankers reported that approximately one in ten 2018 farm operating loans were not repaid and were rolled into 2019 loans.
Less than half of the bank CEOs who responded to the survey think the Federal Reserve should reduce short-term interest rates this month.
The overall index fell to 50.2 from 53.2 in June. This is the seventh time in the past eight months that the index has remained above growth neutral. The index ranges between 0 and 100. Fifty represents growth neutral; an index below 50 indicates negative growth.
“Higher agriculture commodity prices and rebuilding from recent floods supported the Rural Mainstreet Index (RMI) for the month. Furthermore, almost nine of 10 bankers reported tariffs and trade skirmishes have had, or will have, a negative impact on their local economy. This is up from eight of 10 recorded last September,” said Ernie Goss, Ph.D., chair of regional economics at Creighton University’s Heider College of Business.
The confidence index, which reflects bankers’ expectations for the economy six months out, slipped to 51.5 from June’s 53.3, indicating a positive yet slightly weakening outlook among bankers.