Midwest survey suggests growing economic optimism
Rural bankers in 10 Midwest and Plains states are more optimistic about the regional economy, but a new survey released Friday suggests business remains weak in many areas.
"Unfortunately, very healthy farm income is not translating to healthy business activity," Creighton University economist Ernie Goss said.
The overall Rural Mainstreet economic index remained in negative territory below 50 in October but rose to 48.4 from September's 47.6. Any score below 50 suggests the economy will contract over the next six months.
The hiring index remained at a weak 46 in October, and Goss said many areas continue to lose jobs.
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But the report's confidence index, which reflects bankers expectations for the economy six months out, improved in October to 57.3 from 54.9 in September and 46.0 in August.
"The higher agricultural commodities prices should help stimulate the rural economy in upcoming months," said Bradley Bauer, president of Pinnacle Bank in Ogallala, Neb.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed for the report.
Goss and Bill McQuillan, chief executive of CNB Community Bank of Greeley, Neb. oversee the survey.
Goss said several indicators in the survey suggest 2010 has been a good year for farmers in the region. The agricultural equipment sales index jumped to 61 in October from 56.2 in September.
The farmland price index increased to 60 in October from September's 57.7 and August's 55.3. Terry Engelken, CEO of Federation Bank in Washington, Iowa, said recent farmland auctions attracted prices of more than $9,000 per acre.
The home sales index declined to 42.1 in October from September's 47.6, suggesting slumping sales.
The October retail sales index was 45.1, slightly lower than September's 45.2.
Two of the bank indicators, checking deposits and CDs, remained at healthy levels above 50 for the eighth straight month. But the loan volume index fell to 48.4 in October from September's strong 57.4.
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Online: Creighton University economic surveys
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