A monthly assessment of the rural economy has recorded its highest reading for 2019, marking the fourth time in the past five months that the overall index rose above growth neutral.
The Rural Mainstreet Index climbed to 54.2 in November, after reaching 51.4 in October and 50.1 in September. Any score above 50 suggests a growing economy, while a score below 50 indicates a shrinking economy.
Federal agriculture crop support payments and “somewhat higher grain prices” contributed to this month’s boost, said Ernie Goss, an economics professor at Creighton University’s Heider College of Business, which produces the index.
The index, a real-time analysis of the rural economies in 10 states, is based on a survey of bank CEOs in some 200 communities with an average population of 1,300.
Notwithstanding the boost, the rural economy is “still tepid,” said Goss, adding that bankers expect holiday sales to grow by only 1.3% from 2018.
The confidence index, which measures bank CEO expectations for the economy six months out, rose a bit to 44.4 in November from October’s 36.5, but it was still below growth-neutral.
“The trade war with China and the lack of passage of [a replacement for NAFTA] are driving confidence and the economic outlook lower for most areas of the region,” said Goss.
This month’s other favorable indicators included hiring, which rose to 65.3 this month from October’s 59.7. But rural areas of states in the survey, Missouri and Nebraska, lost jobs over the past 12 months.
In addition, the home-sales index climbed to 55.7 in November from October’s 54.2, and the retail sales index for November rose to 50.0 from 47.2 in October.