Linda H. Smith, Top Producer Executive Editor
Each month, researchers at Creighton University poll community bank presidents and CEOs in nonurban, agriculturally and resource-dependent portions of 11 states regarding current and projected economic conditions in their communities. The result is the Rural Mainstreet Index, which ranges from 0 to 100, with 50 indicating neutral growth. The May survey was positive for the third month in a row, reports Ernie Goss, one of the Index's developers. The Index has been below 50 for 15 consecutive months.
"The Rural Mainstreet economy appears to have bottomed out earlier this year,” says Goss. "Although the RMI, at 36.2, remains below growth-neutral, it is the highest since September 2008.
"A weaker outlook for farm income has materially and negatively affected businesses that sell to the farm sector,” Goss says. "As a result, the farmland-price index is below growth-neutral for the seventh straight month, and at 28.3, the farm-equipment sales index is its lowest since the RMI began in 2005, as cautious farmers have cut purchases.”
Bankers who have been around since the 1980s remind that there were no sales of farm equipment then.
For the first time since September 2007, the confidence index, which tracks expectations for the Rural Mainstreet economy six months out, rose above 50. "Bankers in our survey are clearly getting more optimistic in their outlook,” says Goss.
Despite the national banking crisis, the bankers in the survey report healthy banking numbers. "Bank balance sheets are strong for rural Mainstreet bankers compared with their urban counterparts,” Goss notes.