Bank CEOs were slightly less optimistic about the economy this month, according to Creighton University’s Rural Mainstreet Index report.
The RMI fell to a growth-neutral score of 50.1 this month, from 53.8 in January. “The Rural Mainstreet economy continues to experience slow economic growth,” said Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University’s Heider College of Business. “Only 7.4 percent of bankers reported improving economic conditions for the month with 85.2 percent indicating no change in economic conditions from January’s slow growth.”
The index for confidence increased four points to 44.4 in February. “Over the past 11 months, the regional confidence index has fallen to levels indicating a very negative outlook,” Goss said.
The region’s farmland price index fell to 63.5 this month from 66 in January. Farmland prices have been above growth-neutral for 29 straight months, and farmers have expanded their purchases of farm equipment for 25 of the last 27 months, according to the report. The index for farm equipment sales fell to 52.1 from 61.4 in January. Approximately 63 percent of bank CEOs said capturing and sequestering carbon dioxide from ethanol plants in their area afforded farmers to receive “adequate compensation for pipelines crossing their farmland.”
The loan volume index fell 10 points to 48, and the checking-deposit index fell 32 points in February as deposits continued to leave bank balance sheets, while the index for certificates of deposit and other savings instruments remained at a strong 57.7.
The index for new hiring fell to 48.1 this month from 53.9 in January. “Labor shortages continue to be a significant issue constraining growth for Rural Mainstreet businesses,” Goss said. “Despite labor shortages, Rural Mainstreet expanded non-farm employment by 3.4 percent over the past 12 months. This compares to 2.6 percent growth for urban areas of the same 10 states for the same period of time.”