Is it going to come down to companies with manufacturing assets versus companies with intangibles and/or goodwill on the asset side of the balance sheet?
From Creighton University's Heider College of Business, February 18:
February Survey Results at a Glance:
- Overall index rose to its highest reading since January 2020.
- Business and economic outlook soared to its highest level since March 2011.
- Bank CEOs estimated 2021 cash land rent for non-irrigated, non-pastureland at $218.
- Rural Mainstreet retail sales remain very weak.
- The February farmland price index climbed to its highest level since May 2013.
- Bankers expect farm equipment sales to expand by 3.8% over the next 12 months.
OMAHA, Neb. (Feb. 18, 2021) – For the fourth time in the past five months, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index increased to its highest level since January 2020.
Overall: The overall index for February rose to 53.8 from January’s 52.0. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
“Sharp gains in grain prices, federal farm support, and the Federal Reserve’s record-low interest rates have underpinned the Rural Mainstreet Economy. Only 8% of bank CEOs indicated economic conditions worsened from the previous month. Even so, current rural economic activity remains below pre-pandemic levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.
Farming and ranching: For a fifth straight month, the farmland price index advanced above growth neutral. The February reading climbed to 60.0, its highest level since May 2013, and up from 56.3 in January. This is first time since 2013 that Creighton’s survey has recorded five straight months of above growth-neutral farmland prices.
Bank CEOs estimated 2021 cash land rent for non-irrigated, non-pastureland at $218.
The February farm equipment-sales index rose to 62.7, its highest reading since February 2013, and up from 54.5 in January. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last three months.
“As a result of the rapidly improving farm economy, bankers expect farm equipment sales to expand by 3.8% over the next 12 months. This is up significantly from October when bank CEOs estimated that farm equipment sales would fall by an additional 3.1% over the same period,” said Goss.
Banking: Bankers once again reported anemic loan volumes. The February loan volume index increased to a weak 46.1 from January’s 33.9. The checking-deposit index soared to record high 88.5 from January’s 88.0, while the index for certificates of deposit, and other savings instruments increased to 46.2 from 46.0 in January....
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