Rural Mainstreet Index Falls to Growth Neutral

The monthly survey of bank CEOs in a 10-state region showed continued economic uncertainty in rural communities dependent upon agriculture and energy.

Creighton University’s Rural Mainstreet Index for August fell from July’s tepid reading of 53.4 to growth-neutral 50.

The Index ranges from zero to 100, with numbers above 50 suggesting growth and below 50 suggesting contraction.

Professor Ernie Goss with Creighton University said this is the first decline in the overall index since March.

The August farm equipment sales index sank to a very weak 14.2 from July’s 17.9, but was up from June’s record low 12.5.

“With farm income expected to decline for a second straight year,” Goss said, “farmers remain very cautious regarding the purchase of agricultural equipment.”

The confidence index, which reflects expectations for the economy six months out, slumped to 42.0 from 46.6 in July. Goss said farm commodity prices and energy prices led bankers to adopt a dimmer outlook.

The survey also revealed that the farmland and ranchland price index for August increased slightly to 32.7, up from 31 in July. This represents the 21st straight month the index has remained below growth neutral. Bankers projected a 5.8% decline in farmland prices over the next year, which is a percentage point higher than the loss participants projected in August 2014. S