Survey suggests slow economic growth in Midwest, Plains
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The rural economy in 10 Midwest and Great Plains states continues to grow but at "an anemic pace," according to the latest monthly survey of bankers in the region.
The Rural Mainstreet index for the region improved from 52.2 last month to 52.9 this month, suggesting weak economic growth. Anytime the index, which ranges from 0 to 100, is above 50, it suggests the economy will grow.
This month's results were helped by continued healthy growth among companies linked to agriculture, although the growth continues to be slow, said Creighton University economist Ernie Goss, who oversees the survey of bankers in rural parts of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
"Survey results over the past several months, similar to national surveys, indicate that the economy is growing, but at an anemic pace," Goss said. The farmland price index was unchanged at 66.9 for October -- the 21st straight month the index has been above growth-neutral 50. The farm equipment sales index slipped to 63.1 from September's 65.4.
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"Throughout the region, bankers are reporting very strong growth in farmland prices," Goss said. "One banker in Storm Lake, Iowa, reported a recent farmland sale of $13,000 per acre. Current high agriculture commodity prices and record low interest rates are supporting these prices."
The report shows rural areas continue to add jobs, with the jobs index climbing to 56.4 in October from 54.7 in September.
"Year-over-year job growth for Rural Mainstreet communities is approximately three times that of metropolitan areas of the region," Goss said. But "even with the recent strength, employment for Rural Mainstreet communities is down approximately 3.1 percent from pre-recession levels."
Bankers' optimism was unchanged from September, remaining at a neutral 50 -- although that's better than August's weak 44.
For the third straight month, the home sales index remained weak. But it rose slightly from September's 48.5 to 49.3 in October.
The retail sales index also remained below 50, but improved to 49.3 from September's 47.1.
"Heading into the holiday buying season, readings like this are not encouraging for Rural Mainstreet merchants," Goss said.
The bank loan volume index sank to 57.3 from 62.5 in September. The checking deposit index soared to 71.7 from September's 60.3, while the index for certificates of deposit and other savings instruments rose to a weak 44.9 from 41.2 last month.
(Copyright 2011 by The Associated Press. All Rights Reserved.)