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| Creighton University chart compares current month to last month and year ago; click here to download the full report. |
A January Creighton University survey of rural bankers in 10 Midwest states that rely on farming and energy showed overall increasing confidence in the economy amid concerns about excessive inflation, low loan demand and higher long-term interest rates. The index is a survey of bankers in about 200 rural communities with an average population of 1,300 in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
"Recent sharp improvements in agriculture commodity prices, federal farm support payments, and Federal Reserve’s record-low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels," writes Creighton economist Ernie Goss, who compiles the index.
The overall Rural Mainstreet Index climbed above growth neutral for the third time in the past four months, and the farm equipment sales index rose to its highest reading since April 2013. Moreover, for the first time since 2013, Creighton recorded four straight months of above growth-neutral farmland prices.
However, bankers reported "anemic" loan volumes, and a plurality, 44 percent, said they expected low loan demand to be the biggest issue their banks will face in 2021. Only 4% said rising loan defaults and bankruptcies was the biggest issue. That's a near flip-flop from last January, when only 7% said low loan demand was their greatest concern, and 32% said rising loan defaults and bankruptcies were their biggest worry.
The new hiring index fell below growth neutral, and data from the U.S. Bureau of Labor Statistics says non-farm employment levels in the Rural Mainstreet economy are down by 3.3%, or 145,000 from pre-pandemic levels, and down by 5.6%, or 251,000, from last January.
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