Rural Midwestern bankers say local economies remain strong, but they predict a decline in the next six months

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

A February survey of rural bankers in 10 Midwestern states that rely on agriculture and energy marked 15 straight months of a positive economic outlook. The Rural Mainstreet Index rose to 61.5 from January's 61.1 on a scale of 100; anything over 50 is growth-positive. The index surveys 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.

"Strong grain prices, the Federal Reserve’s record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy," writes Creighton University economist Ernie Goss, who compiles the index. Farmland prices are still strong and agricultural equipment has sold at the fastest pace since the spring of 2011.

However, bankers said they expect corn and soybean prices to fall by more than 2 percent over the next six months, and more than 70% said they expect the Federal Reserve to raise short-term interest rates by 1% this year. The confidence index, which predicts the state of the local rural economy six months from now, fell to 51.9 from January's 61.1.