April RMI holds steady

Despite a slight decline, the Rural Mainstreet Index posted a healthy 69.0 in April, up from March’s 71.9, and still well above growth neutral. This is the fifth straight month of economic growth in the survey of rural bank CEOs from the central ag- and energy-dependent states. Just over a third of respondents said their local economies had expanded between April and March. 

The April loan volume index dipped to 58.5 from March’s 60.9. The checking-deposit index soared to a record high 89.3, up from March’s 84.4. The the index for certificates of deposit and other savings instruments declined to 44.6 from 46.9 in March.

For a seventh straight month, the farmland price index advanced above growth neutral. The April reading climbed to 78.6, its highest level since 2012, up from 71.9 in March.  This is the first time since 2013 the RMI has recorded seven straight months of farmland prices above growth neutral.

Bankers reported that approximately 9.1 percent of farmland sales over the past six months have gone to nonfarmer investors.   

The April farm equipment-sales index rose to 67.5, its highest level since 2013, up from March’s very strong 63.5. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last five months.    

The new hiring index sank to a strong 62.5 from 72.9 in March. Despite recent solid job gains for the region, data from the U.S. Bureau of Labor Statistics indicate that nonfarm employment levels are down by 184,000 (nonseasonally adjusted), or 4.2 percent, compared to pre-COVID-19 levels.

Ernie Goss

“Strong growth in grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business, Omaha, Neb.  “Even so, current rural economic activity remains below pre-pandemic levels.”

State-level results generally stayed close to March levels, with Wyoming seeing the largest change (a drop to 67.7 from 81.9). Most states’ indices remained in the high 60s to high 70s. North Dakota was an outlier, with a drop to 55.0 from 57.0 in March. Missouri (77.4 from 79.7), Nebraska (77.1 from 78.8) and South Dakota (77.2 from 76.6) all continued to have high marks. Only South Dakota and Illinois saw increases from the previous months, with the later improving to 69.8 from 68.6 in March.

The hiring index in each state remained below prepandemic levels, ranging from 11.4 percent (North Dakota) to 0.3 percent (Nebraska). 

The RMI surveys community bank presidents and CEOs each month in nonurban agriculturally and energy-dependent areas regarding current and projected economic conditions in their communities. Bankers come from about 200 small towns with an average population of 1,300 in 10 states: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

Goss and Bill McQuillan, former chair of the Independent Community Banks of America, created the monthly economic survey in 2005.