Rural Mainstreet Index Improves for December

The Creighton University Rural Mainstreet Index improved from Novembers weak reading but remained below growth neutral, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The index, like all indices in the survey, ranges between 0 and 100 with 50.0 representing growth neutral, expanded to 47.8 from 44.7 in November. While the overall index remained below growth neutral, it is up approximately 11.4 percent from December, 2016.

"While the overall Rural Mainstreet Index (RMI) for December remained below growth neutral, this is the highest December reading that we have recorded since 2014. Clearly, based on our recent surveys, the negatives are getting less negative," said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton Universitys Heider College of Business.

Only one-fifth, or 20.4 percent, of bank CEOs reported that their local economy was expanding. While this indicator remains bearish, it is well up from the 8.7 percent reporting an expanding local economy in February 2016.

Farming and ranching: The farmland and ranchland-price index for December rose to 39.8 from 36.5 in November. This is the 49th straight month the index has fallen below growth neutral 50.0.

The December farm equipment-sales index improved to 29.3 from Novembers 26.2. This marks the 52nd consecutive month the reading has dropped below growth neutral, 50.0.

Bankers reported an average yearly cash rent per acre of $205 which is down by approximately 10 percent over the past two years.

Banking: Borrowing by farmers climbed for December as the loan-volume index stood at 67.1, up from Novembers 49.1. The checking-deposit index fell to 47.8 from Novembers 59.4, while the index for certificates of deposit and other savings instruments slumped to 42.1 from 44.8 in November.

Approximately one in three bankers reported a decline in bank financed farmland purchases over the past two to five years. This continues a downward trend in bank-financed farmland purchases.

Hiring: The employment gauge climbed to 59.6 from Novembers 57.6. Rural Mainstreet businesses not linked to agriculture increased hiring for the month, and at a faster pace than in November.

Confidence: The confidence index, which reflects expectations for the economy six months out, increased to 51.2 from 40.6 in November, indicating an improvement in the economic outlook among bankers. Concerns about trade, especially current NAFTA negotiations, and low agriculture commodity prices continue to restrain bankers economic outlook, said Goss.

Home and retail sales: The home-sales index moved lower for the Rural Mainstreet economy for December, falling to a solid 53.5 from Novembers 56.6. The December retail-sales index improved significantly to 52.4 from 40.7 in November. This is the highest December retail index recorded since 2014, reported Goss.

Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.

Below are the state reports:

Colorado: Colorados Rural Mainstreet Index (RMI) jumped to 50.3 from 44.8 in November. The farmland and ranchland-price index fell to 40.5 from Novembers 49.5. Colorados hiring index for December climbed to 64.9 from Novembers 58.0.

Illinois: The December RMI for Illinois advanced to 46.7 from 44.8 in November. The farmland-price index rose to 39.9 from 36.5 in November. The states new-hiring index slipped to a healthy 57.5 from last months 58.1.

Iowa: The December RMI for Iowa rose to 48.0 from 45.1 in November. Iowas farmland-price index for December increased to 39.8 from Novembers 36.6. Iowas new-hiring index for December expanded to 60.0 from Novembers 58.7.

Kansas: The Kansas RMI for December climbed to 43.3 from Novembers 39.2. The states farmland-price index increased to 38.4 from 34.8 in November. The new-hiring index for Kansas rose to 50.7 from Novembers 46.8.

Minnesota: The December RMI for Minnesota expanded to 45.4 from 44.2 in November. Minnesotas farmland-price index climbed to 42.5 from 36.3 in November. The new-hiring index for the state jumped to 78.0 from Novembers 54.9.

Missouri: The December RMI for Missouri declined to 55.4 from 56.8 in November. The farmland-price index slipped to 40.1 from 40.9 in November. Missouris new-hiring index soared to 78.0 from 61.2 in November.

Nebraska: The Nebraska RMI for December advanced to 48.3 from Novembers 45.6. The states farmland-price index dipped to 35.8 from last months 36.8. Nebraskas new-hiring index stood at a strong 60.6, up from 59.6 in November.

North Dakota: The North Dakota RMI for December increased to 52.2 from Novembers 50.5. The states farmland-price index moved higher to 41.1 from 38.2 in November. North Dakotas new-hiring index dipped to 68.4 from 69.3 in November.

South Dakota: The December RMI for South Dakota increased to 41.2 from 39.6 in November. The states farmland-price index climbed to 37.8 from 35.0 in November. South Dakota's new-hiring index slumped to 46.5 from Novembers 47.7.

Wyoming: The December RMI for Wyoming expanded to 45.7 from 42.9 in November. The December farmland and ranchland-price index jumped to 39.1 from 36.0 in November. Wyomings new-hiring index climbed to 55.5 from Novembers 54.2.


Story source: Creighton University

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