The Rural Mainstreet Index of economic conditions shows an upward surge in the October survey. Bank CEOs in a 10-state area that includes, Iowa, Missouri, Nebraska and South Dakota, shows the rural economy “soared” and from the first time since June rose above “growth neutral.”
The survey, led by Creighton University economist Ernie Goss, says the survey indicates that the “negative impacts of the drought are being more than offset by the positives of very strong incomes from high agriculture and energy prices.”
Goss says the farmland-price index surged higher as did farm equipment sales. While about 18 percent of bank leaders report 2012 crop yields are higher than last year, almost 70 percent indicate yields will be lower than 2011.
While hiring increased, Goss said it did so at a “snail’s pace” and loan demand shrank unexpectedly. The confidence index for the economy over the next six months increased from September but is still weak. Goss says the housing market turnaround is a big economic confidence booster.
About one-fourth of the bankers surveyed said they believe the US economy is headed toward recession in 2013. The Rural Mainstreet Index surveys bank leaders in 10 Midwest and Great Plains states—Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.