Creighton University regional survey shows “rural mainstreet” economy down for 10th straight month

Creighton University regional survey shows “rural mainstreet” economy down for 10th straight month
RRN Photo / Bryce Doeschot
June 24th, 2024 | Nebraska Examiner

High interest rates, along with weak farm commodity prices and equipment sales, helped push a regional “rural mainstreet” economic index tracked by Omaha’s Creighton University to below growth neutral for the 10th month in a row.

The Rural Mainstreet Index is based on a monthly survey of bank chief executives in 10 states including Nebraska, targeting about 200 rural communities with an average population of 1,300.

It is intended to provide a “real-time” economic analysis of rural agriculturally- and energy-dependent parts of the nation, said Ernie Goss, a Creighton University economist who created and launched the survey in 2006 with Bill McQuillan, former chair of the Independent Community Banks of America.

Besides Nebraska, other states involved in the survey are Iowa, South Dakota, North Dakota, Missouri, Kansas, Colorado, Illinois, Minnesota and Wyoming. 

According to the most recent survey, the overall Rural Mainstreet Index reading sank in June to 41.7, from 44.2 the month before. The index ranges between zero and 100 so a reading of 50 indicates no growth, or growth neutral.

Looking at Nebraska only, the Cornhusker State’s overall index dropped to 39.5 from May’s 41.8 reading. More narrowly, Nebraska’s new-hire index sank to 46.0 from 48.2.

Nebraska’s farmland price index rose to 48.5 from 46.7. According to trade data from the International Trade Association, exports of agriculture goods and livestock for 2024 year-to-date were up 33.8% over the same period in 2023.

Goss said rural bankers remain pessimistic about economic growth for their areas over the next six months. As a region, he said, the June confidence index increased slightly to a still “very weak” 29.2 compared to 28.8 the month before. 

“Weak agriculture commodity prices and farm exports, combined with downturns in farm equipment sales over the past several months, continued to constrain banker confidence,” said Goss.

Other highlights of the regional survey:

  • After rising above the growth neutral threshold for 53 consecutive months, the farm and ranch land price index for the second straight month was below 50.0, but June’s 49.9 reading did climb from May’s 47.9.
  • Farm equipment sales sank below growth neutral for the 12th time in the past 13 months. 
  • Delinquency rates for farm and business loans on rural mainstreet remained virtually unchanged over the past six months. 
  • International Trade Association data showed that regional exports of agriculture goods and livestock for 2024, year-to-date, were down 4.1% from the same period in 2023.
  • After seven straight months of below neutral growth readings, the home sales index “unexpectedly expanded” to 62.5 from 46.0 in May, Goss said. 
  • On the other hand, retail sales continued to fall with a June index of 41.3, which was down from 46.1 in May. Said Goss: “High consumer debt, elevated interest rates and weaker farm income are cutting into retail sales for the Rural Mainstreet Economy.”

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