Thursday, October 20, 2016

Rural economic index in IL-to-WY region drops to 7-year low; negative for 14 straight months

For the 14th straight month the Rural Mainstreet Index was below 50, indicating economic decline 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 dropped to 31.8 in October, its lowest since 2009, from 37.3 in September. It was at 49 in September 2015. The October hiring index declined from 54.8 to 45.4. Rural Mainstreet employment is down 1 percent over the past 12 months, compared to a 1.5 percent increase in urban areas during that same period. For current and historical data by state, click here.

Goss said in a statement, "Over the past 12 months, livestock commodity prices have tumbled by 19.7 percent and grain commodity prices have slumped by 18.5 percent. The economic fallout from this price weakness continues to push growth into negative territory for six of ten states in the region.” (Creighton graphic: Rural Mainstreet Index)
Bank CEOs project 21.6 percent of grain farmers will suffer negative cash flows for 2016, said Goss. The farmland and ranchland price index for October was 25.0, down from 40.3 in September, marking the 35th straight month the index has been below growth neutral of 50.0. October farm equipment-sales index declined from 14.3 to 13.1.

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