Rural Economy Showing Signs Of Improvement

The Rural Mainstreet Index (RMI) increased for the third consecutive month indicating the rural economy is showing signs of improvement. The farmland price index posted its highest one month increase since the initiation of the survey in 2005.

The RMI increased ever so slightly to a 57.5 from a 56.6 in October. According to Creighton University economist Ernie Goss, “Our survey indicates that the Rural Mainstreet businesses are shedding the negative impacts of the 2012 drought. However, given the continuing lack of moisture across much of the region, this economic respite may be short-lived.”

Agriculture: The farmland price index jumped 12.2 points, posting an 83.9 this month, the largest one month increase since the survey started. This marks the 34th consecutive month the index has been above growth neutral. The farm equipment sales index decreased slightly to 60.4 vs. 60.5 last month.

An overwhelmingly 67.7% of bankers indicated high corn prices as the number one challenge for ethanol producers.

Banking: The loan volume index increased to 47.8 from a 44.2 in October. The check deposit index increased to 75.1 from 66.7 last month and the certificate of deposit and savings instruments increased to 45.5 from 42.0 in October. October’s hiring index increased slightly to 53.0 compared to 51.5 last month. The economic confidence index, which reflects expectations of the economy in the next six months, decreased to below growth neutral, 45.6.