Rural Mainstreet Index falls for fifth month in a row; 3 of 4 small-town bankers in Ill.-Wyo. region see recession in 2023

An index of small-town economies in 10 heartland states that are dependent on agriculture and energy production remains below growth-neutral for the fifth month in a row.

Creighton University's Rural Mainstreet Index fell for the sixth time in the past seven months, sinking below growth neutral for a fifth consecutive month. The index is based on a survey of bank CEOs 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 October index fell to 44.2 from 46.3 in September. Its range is 0-100, with 50 representing growth neutral. “The rural mainstreet economy is now experiencing a downturn in economic activity,” said Ernie Goss, the Creighton professor who compiles the index. “Almost one in four bankers, or 23.1 percent, reported that the economy was already in a recession. Approximately, three of four bankers expect a recession to begin in 2023.”

Plymouth County, Iowa (Wikipedia base map)

The index includes state figures and looks at farmland prices and other agricultural inputs. The region’s farmland price index for October declined to 58 from September’s 61.1 but stayed above growth neutral for the 25th straight month. In Plymouth County, Iowa, 55.6 acres sold for $26,250 per acre, setting a new state record, according to Jim Rothermich of the Land Talker, Goss reports.

"Labor shortages continue to be a significant issue constraining growth for Rural Mainstreet businesses," Goss writes. "Despite labor shortages, Rural Mainstreet expanded non-farm employment by 2.9% over the past 12 months. This compares to 3.0% growth for urban areas of the same 10 states for the same period of time."