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Category: Sept. Oct.
Overall: 36.5 37.5
Loan volume: 49.3 42.4
Checking deposits: 61.9 61.0
CDs: 50.1 51.7
Ag land prices: 41.1 43.0
Ag equip. sales: 38.6 36.7
Home sales: 42.7 46.7
Hiring: 27.0 35.6
Retail: 32.8 36.7
6-mo. forecast: 43.5 58.7
An index of 50 is neutral. Higher numbers show expansion, lower numbers show decline. The forecast predicts economic activity in six months.
A survey of rural Midwest bankers indicates that the region’s nonurban economy is still declining, although the bankers said things may be better six months from now despite what they believe will be lagging holiday sales.
The Rural Mainstreet Index registered 37.5 on a 100-point scale, the 20th straight month it fell below the “growth neutral” level of 50. The September index was 36.5.
Declining farm income is hurting the region’s rural economy, said Creighton University economist Ernie Goss. Goss and Bill McQuillan, CEO of City National Bank in Greeley, Neb., started the monthly survey in 2005.
This month, bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming responded to the survey. Too few from Montana responded to count their responses, Goss said.
The bankers saw few signs that the economic downturn is ending, Goss said, although their “confidence index” — indicating the strength of the economy in six months, was 58.7, above the neutral mark and up from 43.5 in September and 27.2 in October 2008.
Goss said recent news about positive economic signs nationally and low interest rates may have boosted the bankers’ confidence.
On average, the 165 bankers expected holiday retail sales to decline 1.5 percent this year from 2008.
The survey results showed continued declining farmland prices, farm equipment sales, home sales, hiring and retail business.
The farmland index has indicated a decline for 12 months in a row, although some bankers reported stronger sales than others, including a $6,650-per-acre sale recently near Utica, Neb., Goss said.
He said rural areas in the region have lost 5 percent of their jobs in the past year, compared with 3.6 percent in urban areas.
The bankers’ responses generated a loan volume index of 42.4, the lowest since November 2006. Some bankers said pressure from regulators was reducing lending, Goss said.
Nebraska’s index was 38.7, down from 40.4 in September. Iowa’s index was 37.1, down from 32.3 in September.
Contact the writer:
444-1080, steve.jordon@owh.com
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