Midwest bankers pessimistic on economic growth, but North Dakota outlook stronger

The Bismarck Tribune — Tue, 20 Feb 2024 19:35:00 GMT

A Creighton University survey of economic conditions in the 10-state Midwest and Plains region slumped for a fifth straight month, though North Dakota's outlook was somewhat brighter.

The overall index for the Rural Mainstreet survey in January was at 48.1. That was up from 41.7 in December, but the survey's index has not been at or above growth neutral since last August. Any readings above 50 on the index, which ranges from 0 to 100, suggests economic growth in the months ahead. Readings below 50 suggest contraction. The August reading was at 50.

"Higher interest rates, weaker agriculture commodity prices and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses and on Rural Mainstreet farmers," said Creighton economist Ernie Goss, who oversees the survey.

Goss noted that Jim Eckert, CEO of Anchor State Bank in Anchor, Illinois, and one of the survey respondents, "indicated that unless crop prices improve, 2024 will not be a good year for area farmers."

The economic conditions pushed the survey's farm equipment sales index below growth neutral for the seventh time in the past eight months. And "For a fourth consecutive month, several bankers voiced concerns over economic losses by pork producers in their area," Goss said.

The business confidence index sank to 38.5 from December's 43.3, indicating that rural bankers are "very pessimistic" about economic growth in the coming six months, according to the survey.

The Rural Mainstreet Index is based on a survey of rural bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming — states dependent on agriculture and/or energy. It focuses on about 200 rural communities with an average population of 1,300 people.

North Dakota's index for January climbed to 64.3 from 52.3 in December. The state's farmland price index declined to 67.0 from 69.7 in December. The state's new hiring index expanded to 54.2 from December's 53.8.

U.S. Bureau of Labor Statistics data indicate that over the past 12 months, North Dakota's Rural Mainstreet economy expanded employment by 4.1%, while the state's urban areas grew employment by a much lower 0.7%.

The full Rural Mainstreet report can be found at http://www.creighton.edu/economicoutlook/mainstreeteconomy.

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MISSOURI

Midwest bankers pessimistic on economic growth, but North Dakota outlook stronger