In May, the Rural Mainstreet Index was above growth-neutral for the first time since August 2015. The index, an economic barometer for the 10-state region that stretches from Illinois to Wyoming, is dependent on agriculture and energy. On a 0-100 scale, it had been below 50 for 20 straight months, indicating economic weakness in the region. But in May the index rose to 50.1, up from 44.6 in April.
Creighton University economist Ernie Goss surveys bank CEOs in rural areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wyoming and the Dakotas.
Goss said, “Stabilizing and slightly improving farm commodity prices helped push the overall index into a weak but above growth neutral for May. The U.S. Department of Agriculture is projecting that net U.S. farm income will sink by 8.7 percent to $62.3 billion for 2017, the fourth consecutive year of declines after reaching a record high in 2013. This downward trend has weighted on our survey results for almost two years.” (Creighton graphic: Rural Mainstreet Index)
The agriculture equipment-sales index jumped to its highest level in more than two years, to 26.8, up from 21.5 in April, and 10.7 in March. Despite reaching its highest level since January 2015, it marks the 45th straight month the reading has fallen below growth neutral of 50.0.
Almost one in four bank CEOs "said the Federal Reserve should raise short-term interest rates at June meetings," Goss notes. "Approximately 28.9 percent of bankers named rising regulatory costs as the biggest challenge to banking operations over the next 5 years. Approximately 11.1 percent of bankers reported farm foreclosures represented the greatest risk to banking operations, more than double the 4.5 percent who identified such foreclosures as the greatest risk in May 2016 survey."
Creighton University economist Ernie Goss surveys bank CEOs in rural areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wyoming and the Dakotas.
Goss said, “Stabilizing and slightly improving farm commodity prices helped push the overall index into a weak but above growth neutral for May. The U.S. Department of Agriculture is projecting that net U.S. farm income will sink by 8.7 percent to $62.3 billion for 2017, the fourth consecutive year of declines after reaching a record high in 2013. This downward trend has weighted on our survey results for almost two years.” (Creighton graphic: Rural Mainstreet Index)
Almost one in four bank CEOs "said the Federal Reserve should raise short-term interest rates at June meetings," Goss notes. "Approximately 28.9 percent of bankers named rising regulatory costs as the biggest challenge to banking operations over the next 5 years. Approximately 11.1 percent of bankers reported farm foreclosures represented the greatest risk to banking operations, more than double the 4.5 percent who identified such foreclosures as the greatest risk in May 2016 survey."
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