Banker Index Marks Sixth Decline in Seven Months
A key indicator of economic health in Midwestern rural U.S. continues to show weakening conditions. The Creighton University Rural Mainstreet Index (RMI) fell for the sixth time in the past seven months, sinking below growth neutral for a fifth consecutive month. This is according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The region’s overall reading for October once again sank below growth neutral to 44.2 from 46.3 in September. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral. This was the fifth consecutive month the overall reading has fallen below growth neutral.
“The rural mainstreet economy is now experiencing a downturn in economic activity. Almost one in four bankers, or 23.1%, report the economy was already in a recession. Approximately, three of four bankers expect a recession to begin in 2023,” says Creighton University’s Dr. Ernie Goss, who conducts the survey.
Farming and ranching: The region’s farmland price index for October declined to 58.0 from September’s 61.1 but moved above growth neutral for the 25th straight month.
Jim Eckert, president of Anchor State Bank in Anchor, Ill., reports, “Corn yields are about the same as 2021. Early reports indicate soybean yields are a little lower than 2021.”
Farm equipment sales: For the second time in the past three months, the farm equipment-sales index slumped below growth neutral to 47.8 from September’s 58.0. The index has risen above growth neutral for 21 of the last 23 months.
Confidence: The slowing economy, strong energy prices, higher borrowing costs and elevated agriculture input costs pushed the business confidence index down to 30.8 from 40.7 in September. “This is the lowest reading for the confidence index since May 2020,” notes Goss.
The Rural Mainstreet Index is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300.
