The Rural Mainstreet Index based on a survey of rural bankers is up slightly, but continues to show an economy in decline for the third month in a row.
The index was at 48.3 for September, up from 47.1 in August and 47.9 in July, according to Creighton University economist Ernie Goss. An index higher than 50 indicates growth, and below indicates decline.
Goss said the drought is to blame for the economic lull.
“The drought continues to dampen economic activity for businesses linked to agriculture such as ethanol and agriculture-equipment sellers,” Goss said. “I expect food processors to take a hit later in the year as higher food prices work their way through the system.”
Goss, along with Greeley, Neb., banker Bill McQuillan, created the survey. It included 194 bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
Nebraska’s index rose to 48.8 in September from 44.1 in August. Its farmland price index increased to 59.2 in September from 48.9 in August, while its new hiring index bumped up to a weak 47.0 from 46.0 in August.
In Iowa, the September index score slipped to 48.7 from 49.2 in August. The farmland price index increased, while new hiring decreased.
Across the 11-state region, the hiring index dropped to 50.9 from 51.9 in August and six-month confidence increased slightly to a frail 43.0 from a weaker 39.6 in August.
Though home and retail sales slipped to 58.8 from 60.2 in August, the housing market is improving, Goss said.
The survey also revealed the farm equipment sales index rose to 50.0 after a weak 38.3 in August.
The farmland price index — at 61.6, up from 52.8 in August — is its highest level since May, and is the 32nd consecutive month that the farmland price index has been above 50.
“Despite the drought,” Goss said, “farmers continue to put more air into the farmland price bubble.”
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