Tuesday, January 26, 2016

Rural Mainstreet Index drops for fifth straight month, reaches lowest total since August 2009

Creighton University's Rural Mainstreet Index for January fell for the fifth straight month, reaching its lowest reading since August 2009, Steve Jordan reports for the Omaha World Herald. The index for the region in January was 34.8, down from 41.5 in December. The index, which stood at 50.9 a year ago, has now been below 50 for five straight months, which indicates economic decline. One of the reasons the index has reached such low numbers is that farm prices are down 15 percent and fuel prices down 20 percent over this time last year.

"The total of 178 bank executives surveyed in Nebraska, Iowa and eight other states in the region also had a dim view of the economy in the coming months, said Creighton economist Ernie Goss, who said "bankers see few factors pointing to improvements for the Rural Mainstreet economy.”

"Farm equipment sales showed the lowest rating since the survey began in 2005, and farmland prices declined for the 26th straight month, Goss said, although price trends vary and are increasing in some areas," Jordan writes. "The lower grain and cattle prices are discouraging farm equipment sales, affecting dealers and manufacturers in the region. Lower grain and fuel prices have had 'moderate impacts' on ethanol production in the region, he said. About two out of 10 bankers said ethanol plants in their areas have reduced production, with seven in 10 saying local plants haven’t changed. Hiring remained positive although retail and home sales showed declines."

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