Negatives are ‘less negative’

The rural Midwestern economy is close to growing, according to a survey of bankers earlier this month.

The Rural MainStreet Index was 47.4 on a scale of zero to 100, its highest level in nearly two years. An index above 50 would indicate economic growth.

March was the sixth month out of the last seven that the index has increased, reaching a level more than double the 18.7 figure in March 2009, said Creighton University economist Ernie Goss. The index was 36.6 in February and has been below 50 for 25 consecutive months.

“We can safely say that the negatives are getting decisively less negative as the farming and ranching economies improve,” Goss said. “Even so, economic conditions are weaker in the rural areas than in the urban areas of the region as the softer 2009 farm economy continues to work through rural Main Street businesses in the region.”

Goss and Greeley, Neb., banker Bill McQuillan originated the survey, which this month received responses from 165 bank executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

Four categories in the survey loan volume, checking deposits, certificates of deposit and farmland prices were in the growth zone, and all but farm equipment sales showed improvement.

The survey’s hiring index increased sharply to 45.7 from 34.8 in February and from 23 in March 2009.

The bankers also showed more optimism about the economy’s status six months from now, registering a “confidence index” of 54.3, up from 35.9 a year ago.

The biggest economic challenges, the bankers said, were in ethanol production and the availability of venture capital.

Nebraska’s index increased to 49.7 from 38.5. Goss said the state’s rural areas continue to lose jobs but at a lower rate. Iowa’s index was 48, up from 37.1 in February, with increases in farmland prices and slower job losses.

Contact the writer:

444-1080, steve.jordon@owh.com

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