From Creighton University's Heider College of Business:
September Survey Results at a Glance:
* For an eighth straight month, the overall index rose above growth neutral.
* More than eight of 10 bankers reported negative impacts on the local economy from tariffs.
* But only 4 of 10 bankers supported cutting recently enacted tariffs on imported goods.
* Farmland values continued to decline.
* More than one-fifth of bank CEOs support raising Federal Reserve interest rates two or more times in 2018.
OMAHA, Neb. (Sept. 20, 2018) – The Creighton University Rural Mainstreet Index climbed above growth neutral in September for an eighth straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The overall index declined to 51.5 from 54.8 in August. The index ranges between 0 and 100 with 50.0 representing growth neutral.
“Our surveys over the last several months indicate that the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Farming and ranching: The farmland and ranchland-price index for September sank to 37.5 from 44.7 in August. This is the 58th straight month the index has fallen below growth neutral 50.0.
The September farm equipment-sales index fell to 35.9 from August’s 37.8. This marks the 61st consecutive month that the reading has moved below growth neutral 50.0.
Banking: Borrowing by farmers expanded for September, but at a slower pace than in August, as the loan-volume index declined to 65.3 from 72.2 in August. The checking-deposit index increased to 39.4 from August’s 36.0, while the index for certificates of deposit and other savings instruments fell to 45.5 from 48.8 in August.
Hiring: The employment gauge dipped to a strong 65.3 from August’s 68.7. The Rural Mainstreet economy is now experiencing positive job growth. Over the past 12 months, the Rural Mainstreet economy added jobs at a 2.3 percent pace compared to a lower 1.7 percent for urban areas of the same 10 states.
Confidence: The confidence index, which reflects expectations for the economy six months out, rose to a weak 49.5 from August’s 46.5, indicating a pessimistic economic outlook among bankers.
“Just as last month, tariffs and trade tensions weakened the economic outlook of bank CEOs,” said Goss.
Bankers were asked their position on recently implemented and proposed tariffs on imported goods. More than eight of 10 bankers, or 81.9 percent, reported negative impacts on the local economy from tariffs. Despite this, fewer than half, or 42.4 percent, support cutting or eliminating those tariffs. Approximately 45.5 percent support continuing current tariffs and trade policy, while 12.1 percent endorse pursuing a more hawkish approach by raising tariffs....MUCH MORE
