Rural Mainstreet Economy Slows in September: Half of Bankers Expect Economic Conditions to Worsen

September 2023 Survey Results at a Glance:

• For the first time since March of this year, the overall Rural Mainstreet Index sank below growth neutral.
• Approximately half of bankers expect economic conditions to worsen in the next six months.
• A downturn in farm income was registered by bank CEOs as the No. 1 challenge to banking profitability for the next 12 months.
• For the fifth time in the past 12 months, farming equipment sales declined.
• Fewer than 4% of bankers reported an upturn in farm loan delinquencies over the past six months.
• Bank CEOs expect rising interest rates to represent the second greatest challenge to banking operations over the next 12 months.
• Approximately 46.4% of bankers indicated that they expect another banking crisis in 2023.
• The region’s agriculture exports, including processed foods, fell from $19.95 billion in the first seven months of 2022 to $18.45 billion for the same period in 2023, for a 7.4% slump.

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OMAHA, Neb. (September 21, 2023) — For the first time since March of this year, the overall Rural Mainstreet Index (RMI) sank below growth neutral for September, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
 
Overall: The region’s overall reading for September fell to 49.5 from August’s 50.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
 
“This is the weakest recorded reading since March of this year. Bankers indicated that the biggest challenge to community bank profitability over the next 12 months will be a downturn in farm income,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
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