- For an eighth straight month, the overall index rose above growth neutral.
- More than eight of 10 bankers reported negative impacts on the local economy from tariffs.
- But only 4 of 10 bankers supported cutting recently enacted tariffs on imported goods.
- Farmland values continued to decline.
- More than one-fifth of bank CEOs support raising Federal Reserve interest rates two or more times in 2018.
Overall: The overall index declined to 51.5 from 54.8 in August. The index ranges between 0 and 100 with 50.0 representing growth neutral.
“Our surveys over the last several months indicate that the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
The September farm equipment-sales index fell to 35.9 from August’s 37.8. This marks the 61st consecutive month that the reading has moved below growth neutral 50.0.
Banking: Borrowing by farmers expanded for September, but at a slower pace than in August, as the loan-volume index declined to 65.3 from 72.2 in August. The checking-deposit index increased to 39.4 from August’s 36.0, while the index for certificates of deposit and other savings instruments fell to 45.5 from 48.8 in August.
Hiring: The employment gauge dipped to a strong 65.3 from August’s 68.7. The Rural Mainstreet economy is now experiencing positive job growth. Over the past 12 months, the Rural Mainstreet economy added jobs at a 2.3 percent pace compared to a lower 1.7 percent for urban areas of the same 10 states.
Confidence: The confidence index, which reflects expectations for the economy six months out, rose to a weak 49.5 from August’s 46.5, indicating a pessimistic economic outlook among bankers.
“Just as last month, tariffs and trade tensions weakened the economic outlook of bank CEOs,” said Goss.
Bankers were asked their position on recently implemented and proposed tariffs on imported goods. More than eight of 10 bankers, or 81.9 percent, reported negative impacts on the local economy from tariffs. Despite this, fewer than half, or 42.4 percent, support cutting or eliminating those tariffs. Approximately 45.5 percent support continuing current tariffs and trade policy, while 12.1 percent endorse pursuing a more hawkish approach by raising tariffs.
Home and Retail Sales: The home-sales index decreased to a still solid 54.7 from 63.1 in August. Retail sales sank for the month with an index of 48.4 from August’s 53.5.
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. Below are the state reports:
Colorado: Colorado’s Rural Mainstreet Index for September climbed to 56.1 from 55.8 in August. The farmland and ranchland-price index slumped to 38.0 from 45.1 in August. Colorado’s hiring index for September slipped to 68.1 from August’s 69. Colorado’s Rural Mainstreet economy added jobs at a 1.5 percent pace over the past 12 months.
Illinois: The September RMI for Illinois declined to 52.4 from 54.1 in August. The farmland-price index rose to 45.5 from August’s 45.0. The state’s new-hiring index fell to 65.9 from last month’s 68.4. According to Jim Eckert, president of Anchor State Bank in Anchor, “Harvest is underway in our area. Corn yields are 10 percent (or more) less than last year. Not too many soybeans have been harvested yet, but early fields are disappointing.” Illinois’s Rural Mainstreet economy added jobs at a 1.9 percent pace over the past 12 months.
Iowa: The September RMI for Iowa sank to 51.2 from August’s 56.8. Iowa’s farmland-price index for September sank to 37.3 from August’s 44.1. Iowa’s new-hiring index for September jumped to 61.1 from August’s 59.1. Iowa’s Rural Mainstreet economy added jobs at a 1.3 percent pace over the past 12 months.
Kansas: The Kansas RMI for September slipped to 53.2 from August’s 56.3. The state’s farmland-price index sank to 38.1 from 45.3 in August. The new-hiring index for Kansas declined to 69.0 from 71.7 in August. Kansas’s Rural Mainstreet economy added jobs at a 2.1 percent pace over the past 12 months.
Minnesota: The September RMI for Minnesota fell to 50.0 from August’s 53.1. Minnesota’s farmland-price index slumped to 37.2 from 44.0 in August. The new-hiring index dipped to 58.8 from August’s 59.0. Minnesota’s Rural Mainstreet economy added jobs at a 1.4 percent pace over the past 12 months.
Missouri: The September RMI for Missouri fell to 52.7 from 56.4 in August. The farmland-price index for the state sank to 37.9 from August’s 45.3. Missouri’s new-hiring index for September declined to 67.1 from August’s 72.0. Missouri's Rural Mainstreet economy added jobs at a 1.5 percent pace over the past 12 months.
Nebraska: The Nebraska RMI for September sank to 52.0 from 55.2 in August. The state’s farmland-price index fell to 37.6 from last month’s 44.9. Nebraska’s new-hiring index declined to 64.2 from 67.4 in August. Nebraska's Rural Mainstreet economy added jobs at a 1.2 percent pace over the past 12 months.
North Dakota: The North Dakota RMI for September declined to 50.5 from August’s 52.4. The state’s farmland-price index moved lower to 37.1 from 43.8 in August. The state’s new-hiring index increased to 58.4 from 56.1 in August. North Dakota's Rural Mainstreet economy added jobs at a 0.8 percent pace over the past 12 months.
South Dakota: The September RMI for South Dakota remained above growth neutral, but fell to 52.8 from August’s 55.4. The state’s farmland-price index declined to 38.0 from August’s 44.9. South Dakota’s new-hiring index dipped to 67.5 from 67.8 in August. South Dakota's Rural Mainstreet economy added jobs at a 3.0 percent pace over the past 12 months.
Wyoming: The September RMI for Wyoming sank to 53.5 from August’s 56.4. The September farmland and ranchland-price index moved lower to 38.4 from August’s 45.4. Wyoming’s new-hiring index slipped to a very healthy 70.4 from 72.1 in August. Wyoming’s Rural Mainstreet economy added jobs at a 3.5 percent pace over the past 12 months.