Good farming weather and consistent improvement in the national economy helped boost a rural Midwest economic indicator to its highest level since December, Creighton University economist Ernie Goss said Thursday.
The Rural Mainstreet Index, based on survey of 189 bankers in non-urban communities in a 10-state region, rose to 60.5, up from 58.8 in May and well ahead of the growth-neutral level of 50.
“This year's healthy rainfall for much of the area has boosted growth over the past several months compared to the same period last year,” Goss said. The positive signs also boosted the bankers' outlook for the coming six months, raising the survey's confidence index to 60 from 54.5 in May.
The rate of growth in farmland prices slowed for the sixth time in seven months, although prices were still advancing. The farmland price index was 58.4, down from 62.1 in May. The index has indicated growing prices since February 2010, reflecting prices that have reached record levels in the Midwest in recent months.
“We are tracking a clear downward trend in farmland price growth,” Goss said, which would continue as prices for farm commodities weaken and as the U.S. dollar becomes more valuable in relation to foreign currencies. A stronger dollar would reduce demand for farm exports by making U.S. products more expensive.
The bankers said loan demand was increasing and also reported increased hiring, home sales and retail sales. The index for home sales rose to 78.1, which Goss said reflects a recovery in the overall U.S. housing market.
The index for Nebraska was 56.5, down from 57.7 in May but the fifth straight month to reflect economic growth. The farmland index for the state was 59.2, up from 53.9 in May, and the hiring index was 53.7, down from 53.9 in May.
Iowa's index was 62.2, up from 58.1 in May, even though its farmland price index dropped to 49.6 from 60.7. Iowa's hiring index for June was 55.3, down from 59.1 in May but still solid, Goss said.
Goss and Greeley, Neb., banker Bill McQuillan originated the survey, which this month received responses from bank executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
Rural Mainstreet Index
The figures are from a survey of 189 bank executives in rural and non-urban areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
|Ag land prices||62.1||58.4|
|Ag equipment sales||52.4||53.2|
An index of 50 is neutral. Higher numbers show expansion, lower numbers show decline. The forecast predicts economic activity in six months.