Positive economic sentiment continues, confidence drops

Banker confidence remains strong but is at its lowest level in nearly a year, according to the monthly Creighton University Rural Mainstreet Economy survey.

The overall index remained above growth-neutral for the 11th straight month, increasing to 66.1 this month from 62.5 in September; economic confidence, however, declined for the fourth straight month. The index, which ranges from 0 to 100, tracks responses from bank CEOs. 

Most individual measurements remained above 50: The region’s farmland price index decreased to 81.5 from last month’s record high of 85.2. This month’s loan volume index fell to 53.6 from 58.8 in September. The index for certificates of deposit and other certificates fell to 32.1 from 37.5 in September. The hiring index increased to 71.4 from 67.9 in September. Despite much growth, the study found that regional nonfarm employment remained below pre-Covid-19 levels. The home-sales index increased to 73.2 in October, and the retail-sales index dropped to 55.4 from 58.9 in September. 

Almost one-third of bankers said congestion at transportation hubs represented the greatest challenge to farmers. More than 82 percent of bankers said farmers in their area were in a good cash position and had minimal borrowing need. Despite the positive sentiment, more than eight of 10 bankers said President Joe Biden’s step-up basis proposal would have an adverse impact on the Rural Mainstreet economy. 

“Healthy farm prices and federal stimulus spending are having very positive impacts on Rural Mainstreet retail sales and home sales,” said Ernie Goss, PhD, Jack A. MacAllister chair in regional economics at Creighton University’s Heider College of Business. 

Intended as an early snapshot of the economy of rural agriculturally and energy-dependent portions of the United States, the survey covers 10 states: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.   

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. USDA data show that 2021 year-to-date agriculture exports are more than 25.4% above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” Goss said.