Rural economy growth remains healthy, but slowing
A monthly report shows rural economy continues to expand, but the rate of growth is slowing and rural bankers are expecting farm income to decline from the previous year.
The Rural Mainstreet Index is a monthly survey of bank CEOs in a 10-state area mostly spread across the Midwest released by Creighton University. The survey reveals the economic index fell 1.5 from July to 55.8 in August, however the current month’s index figure is 8.7 above year-ago levels.
According to the report, the index ranges from 0 to 100, an index above 50% indicates expansion.
Creighton University economist Ernie Goss says last year’s index was greatly hampered by the drought. Lower agriculture commodity prices this summer continue to weigh on farm economy and businesses tied to agriculture.
The survey also shows farm land price increases are slowing and farm equipment sales are lower for the first time in three years.
The Omaha World-Herald reports non-farm investors aren’t bidding as aggressively for farmland as only 20 percent of farmland sales are purchased by non-farm investors.
Other categories showing slowed growth include a 5.2 percent drop in loan volume and a 1.5 percent decline in rural hiring.
The Associated Press reports survey participants remain positive about the economy, but are losing enthusiasm. The confidence index, rating expectations for the economy over the next six months, moved 3.2 points lower in August to 53.4%.
The August index is based on a survey of 188 rural and small-town bank executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.