- The Rural Mainstreet Index fell below growth neutral to its lowest level in almost two year.
- Three of four bank CEOs reported the trade war was having a negative impact on their local economy.
- Seven of 10 bankers support continuing, or even raising tariffs on imported Chinese goods.
- Despite worsening economic conditions on the farm, bankers expect only a modest 4% rate of farm loan defaults over the next year.
- Business confidence index plummeted to its lowest level since October 2017.
Overall: The overall index slumped to 46.5 from 50.2 in July. This is the lowest reading for the index since October 2017. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicates negative growth for the month.
“The trade war with China and the lack of passage of the USMCA (NAFTA’s replacement) are driving growth lower for areas of the region with close ties to agriculture. Despite a $16 billion federal government support package coming soon, a drop in farm income is negatively affecting the Rural Mainstreet Economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Three of four bankers reported the trade war was having a negative impact on their local economy.
As stated by Jeffrey Gerhart, CEO of the Bank of Newman Grove in Newman Grove, Nebraska, “Trade wars have been and will continue to be a drain on our ag economy”.
“Despite the negative impact of tariffs and the trade war, only 28.2% of bankers support cutting tariffs on imported goods from China,” said Goss.
Rod Cornelius, market president for Pinnacle Bank in Grand Island, Nebraska reported, “I quickly surveyed 12 local producers, a majority indicated (U.S. should) increase tariff pressure - go big or go home. Although the majority again indicated the tariffs are negatively impacting the local economy.”