Rural Mainstreet Index Stalls at Growth Neutral

The Creighton University Rural Mainstreet Index remained above the 50.0 threshold for May and June according to the latest monthly survey of bank CEOs in rural areas that depend on agriculture and/or energy.

The index, which ranges between 0 and 100, dipped to 50.0 from 50.1 in May. The last time the overall index was at or above growth neutral was August 2015.

“Stabilizing and slightly improving farm commodity prices helped push the overall index at or above growth neutral for the last two months,” said economist Ernie Goss, chair of regional economics at Creighton University. “Though grain prices remain below break-even for most farmers, recent improvements in cattle and hog prices have boosted the overall index for the Rural Mainstreet Economy to growth neutral.”

The farm equipment-sales index fell to 26.2 in June from 26.8 in May.
Also noteworthy from the survey:

• More than three-fourths of bank CEOs reported a shortage of qualified or skilled workers.
• Almost one fourth of bankers reported rejecting a higher percentage of farmer loan applications, and approximately 60.9 percent reported boosting collateral on farm loans.
• The confidence index, which reflects expectations for the economy six months out, expanded to 48.9 from 46.6 in May, indicating continued concern among bankers.

“As livestock prices have improved, bankers’ economic outlook has advanced, but it still reflects lackluster economic confidence,” Goss said.

The Rural Mainstreet Index (RMI) covers 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.