Thursday, February 16, 2017

Rural Mainstreet Index highest since September 2015, but remains negative for 18th straight month

The Rural Mainstreet Index in February reached its highest level since September 2015, but still remains negative, below 50 on a 0-100 scale, for the 18th straight month, indicating economic weakness in the 10-state region that stretches from Illinois to Wyoming and is dependent on agriculture and energy. Creighton University economist Ernie Goss surveys bank CEOs in rural areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wyoming and the Dakotas.

The index, measured on a scale of 100, was 45.8 in February, up from 42.8 in January. It was at 49 in September 2015. Only 14.9 percent of bankers indicated their local economy was expanding, while 34 percent said their local economy remains in an economic downturn. "On average, farmland prices have declined by 5.1 percent over the past 12 months. Approximately 73.9 percent of bankers expect agriculture-equipment sales to continue to decline in their area over the next year."

Goss said, “Weak farm commodity prices continue to squeeze Rural Mainstreet economies. However, the negatives are getting less negative. Over the past 12 months, livestock commodity prices have tumbled by 9.4 percent and grain commodity prices have slumped by 6.3 percent, both an improvement over last month." (Creighton graphic: Rural Mainstreet Index)

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