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RURAL MAINSTREET ECONOMY STABILIZES IN GROWTH RANGE: CONCERNS OVER LOAN DEFAULTS DROP SIGNIFICANTLY
Source: Creighton University news release

To view the complete report, click here.

Omaha, NE - For the third time in the past four 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 second highest level since January 2020.

Overall: The overall index for January rose to 52.0 from December's 51.6. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

"Recent sharp improvements in agriculture commodity prices, federal farm support payments, and Federal Reserve's record-low short-term interest rates have underpinned the Rural Mainstreet Economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels," said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

"Bankers reported that their biggest economic concerns for 2021 are excessive inflation and higher long-term interest rates," said Goss.

Jim Levick, president of Nebraska State Bank in Oshkosh, Nebraska said, "I feel the economy is moving in a positive direction that can be rattled by a combination of higher taxes, higher inflation, and a return of stricter regulation."

Farming and ranching: For a fourth straight month, the farmland price index advanced above growth neutral. The January climbed to 56.3, its highest level since July 2013, and up from 55.0 in December. This is first time since 2013 that Creighton's survey has recorded four straight months of above growth-neutral farmland prices.

The January farm equipment-sales index rose to 54.5, its highest reading since April 2013, and up from 50.2 in December. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last two months.

"As a result of the rapidly improving farm economy, the farm Exchange Traded Fund (MOO) traded on the New York Stock Exchange has risen to a record high of $83.32," said Goss.


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