From Creighton's Heider College of Business:
May Survey Results at a Glance:
- Overall index rocketed to a record high.
- Approximately, 60.6% of bank CEOs reported that their local economy expanded between April and May.
- Almost nine of 10 bank CEOs indicated that hiring at their bank and in the area was restraining growth.
- For the first time since 2013, the regional farmland prices expanded for eight straight months.
- On average, bankers reported annual cash rent per acre of $228, which represented growth of 7.3% over the past 12 months.
OMAHA, Neb. (May 20, 2021) – For the sixth straight month, 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.
Overall: The overall index for May jumped to a record high of 78.8 from April’s very healthy 69.0. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
Approximately, 60.6% of bank CEOs reported that their local economy expanded between April and May.
“Strong grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. 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.
Almost nine of 10 bank CEOs indicated hiring at their bank and in the area was restraining growth.
Farming and ranching: For an eighth straight month, the farmland price index advanced above growth neutral. The May reading slipped from April’s nine-year high climbed of 78.6 to 78.1 for May. This is first time since 2013 that Creighton’s survey has recorded eight straight months of farmland prices above growth neutral.
On average, bankers reported annual cash rent per acre of $228 which represented growth of 7.3% over the past 12 months.
Rod Cornelius, market president of Pinnacle Bank in Grant, Nebraska, “(On average) Nonirrigated crop land cash rents are at $60. Irrigated crop land cash rents are $190.”
The May farm equipment-sales index rose to 67.9, its highest level since 2013, and up from April’s 67.5. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last six months.
Banking: The May loan volume index increased to 59.0 from April’s 58.5. The checking-deposit index declined to a very strong 87.9 from April’s record high 89.3, while the index for certificates of deposit, and other savings instruments, declined to43.9 from 44.6 in April.
Hiring: The new hiring index climbed to 72.7 from 62.5 in April. Despite recent solid job gains for the region, data from the U.S. Bureau of Labor Statistics indicate that nonfarm employment levels for the Rural Mainstreet economy are down by 112,800 (nonseasonally adjusted), or 2.6%, compared to pre-COVID-19 levels....
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