From Creighton's Heider College of Business, March 18:
March Survey Results at a Glance:
- Overall index rocketed to a record high for the month.
- Approximately, 68.8% of bank CEOs reported an expanding local economy, while the remaining 31.2% indicated little or no growth.
- The farmland price index advanced its highest level since November 2012.
- The farm equipment-sales index rose to its highest reading since February 2013.
- Approximately 82.8% of bank CEOs recommended that the Federal Reserve raise interest rates by at least one-fourth of one percentage point in the next 12 months.
- Despite recent job gains, the region’s nonfarm employment level remains 218,600 jobs below its pre-COVID-19 level.
OMAHA, Neb. (Mar. 18, 2021) – For the fifth time in the past six 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 launching the survey in January 2006.
Overall: The overall index for March soared to a record high 71.9 from February’s solid 53.8. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
Approximately, 68.8% of bank CEOs reported that their local economy was expanding, while the remaining 31.2% indicated little or no growth.
“Sharp gains in grain prices, federal farm support, and the Federal Reserve’s record-low interest rates have underpinned the Rural Mainstreet Economy. Only 3.1% 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 sixth straight month, the farmland price index advanced above growth neutral. The March reading climbed to 71.9, its highest level since November 2012, and up from 60.0 in February. This is first time since 2013 that Creighton’s survey has recorded six straight months of farmland prices above growth neutral.
Bankers reported that approximately 12.3% of farmland sales were cash sales, which is down from 17.3% recorded in February 2020.
The March farm equipment-sales index rose to 63.5, its highest reading since February 2013, and up from 62.7 in February. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last four months.
Banking: For the first time since September of last year, bankers reported an expansion in loan volumes. The March loan volume index increased to 60.9 from February’s 46.1. The checking-deposit index sank from February’s record high 88.5 to 84.4, while the index for certificates of deposit, and other savings instruments, increased to 46.9 from 46.2 in February.
This month, 82.8% of bankers said they support at least one interest rate hike in the next 12 months....
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