The Midwestern economy edged above growth-neutral this month even as troubling economic signs lingered, according to Creighton University’s Rural Mainstreet Index report.
The index increased to 50.1 from 45.6 in March, according to the survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The index for economic confidence fell one point to 38 amid perceived weakening economic conditions, higher borrowing costs and labor shortages.
“The Rural Mainstreet economy continues to experience slow, to no, to negative economic growth,” said Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton’s Heider College of Business. “Only 8 percent of bankers reported improving economic conditions for the month, with 84 percent indicating no change in economic conditions from March’s negative growth.”
Farm prices remained strong. The regional index increased to 64.6 from 63 in March. The index for farm equipment sales fell to 54.3 from 59.5 in March. The index for loan volumes remained strong at 62.5, slightly lower than 63 in March. The checking-deposit index fell to a record-low 25 from March’s 40.9, while the index for certificates of deposit and other savings instruments fell one point to 74 from a record-high of 75 last month.
The labor market remained tight but strong. The index for new hiring increased to 54.2 from 45.5 in March, even as labor shortages continued to constrain growth for regional businesses. The index for home and retail sales increased eight points to 44, its 11th straight month of it being under 50. “A slowing economy, higher mortgage rates and low housing inventories for the past year slowed home sales in the region,” Goss said.