For the fifth straight month, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The overall index for April slipped to a still healthy 69.0 from a record high 71.9 in March. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral. Approximately, 37.9% of bank CEOs reported that their local economy expanded between March and April.
“Strong growth in grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Fully 100% of bank CEOs indicated that export markets were important, or very important, to their local economy.
Farming and ranching: 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, and up from 71.9 in March. This is first time since 2013 that Creighton’s survey has recorded seven straight months of farmland prices above growth neutral.
Bankers reported that approximately 9.1% of farmland sales over past six months have gone to nonfarmer investors.
The April farm equipment-sales index rose to 67.5, its highest level since 2013, and 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.
Below are the state reports:
Nebraska: The Nebraska RMI for April slipped to77.1 from March’s 78.8. The state’s farmland-price index rocketed to 82.6 from last month’s 76.1. Nebraska’s new-hiring index declined to 67.5 from 78.4 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Nebraska’s Rural Mainstreet nonfarm employment remains more than 800 jobs, or 0.3%, below its pre-COVID-19 level.
Iowa: The April RMI for Iowa decreased to 69.8 from March’s 71.6. Iowa’s farmland-price index rose to 78.6 from 72.4 in March. Iowa’s new-hiring index for April fell to 63.5 from 72.7 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Iowa’s Rural Mainstreet nonfarm employment remains more than 27,000 jobs, or 4.2%, below its pre-COVID-19 level.
Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities, and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.
This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005 and launched in January 2006.