The Rural Mainstreet Index (RMI) declined modestly this month, due to large decreases in farm equipment sales and loan volume. The main driver of the index continues to be farm income, and for the 25th straight month, the index has been above growth neutral.
The Rural Mainstreet Index dropped slightly to 59.6 from 59.8, yet remains above the 55.3 it posted 12 months prior.
According to Larry Winum, president of Glenwood State Bank in Glenwood, Iowa, “Agriculture had another strong year with all indications that 2012 will continue to be positive for farmers."
The farmland price index increased to 75.0 this month from 74.3 in January. This marks the 25th straight month the index has been above growth neutral. The farm equipment sales index declined to 63.4 from 72.3 in January.
Farmland Price Index
Bankers were asked what their forecast was for farmland prices in the coming year. Almost half, 46%, forecast prices to grow between 1% and 5% while only 8% of bankers expect prices to decline.
The loan volume index decreased to 31.2 from 45.5 a month prior. The check deposit index decreased to 64.5 from 68.2 in January and the certificate of deposit and savings instruments increased to 50.0 from 47.8 last month.
October's hiring index increased to 53.7 compared to 51.5 in January. “Year-over-year job growth for Rural Mainstreet communities is almost double that for urban areas of the region,” said Creighton University economist Ernie Goss.
The economic confidence increased to 60.3 from January's 56.1 as outside markets continue to affect the economic outlook, “Improving national economic reports are clearly and positively affecting the economic outlook of bankers in our survey,” said Goss.
This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.