Surveyed rural bankers still optimistic about economy but worry about drought, inflation and federal bank regulations

Creighton University chart compares current month to last month and year ago; click here to download it and chart below.

A June survey of rural bankers in 10 Midwest states that rely on agriculture and energy found they still have strong expectations for the economy, but are concerned about cybersecurity, inflation, drought, and more. The Rural Mainstreet 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.

The overall index remained above growth-neutral for the seventh straight month, falling to 70 on a scale of 100 from last month's record 78.8. For the first time since it began in 2013, the index recorded nine straight months of farmland prices above growth-neutral. Almost half the bankers reported that their local economy expanded from May to June. Federal stimulus/relief funds, strong grain prices and expanding exports played a big role, writes Creighton University economist Ernie Goss, who compiles the index. 

Despite recent job gains, overall non-farm employment in the surveyed states is 2% lower than pre-pandemic levels. Employment in Kansas, Missouri and Nebraska exceeds pre-pandemic levels.

Bankers raised other concerns about the future (see chart below). The largest share, about one-fourth, predicted rising government regulations as the greatest threat to bank operations in 2021-22. A downturn in farm income was a close second, followed by cyberthreats.