A key gauge of rural America’s economic health has reached its highest level since June 2018.
Creighton University’s Rural Mainstreet Index rose to 55.9 in January from 50.2 in December. It’s now been above the growth-neutral mark of 50.0 for 11 of the past 12 months. Any score above 50 suggests a growing economy, while a score below 50 indicates a shrinking economy.
The index, a real-time analysis of the rural economy in 10 states, is based on a survey of bank CEOs in some 200 rural communities with an average population of 1,300.
“Only 17.7% of bank CEOs reported that their local economy was in economic downturn. This is an improvement from one year ago when 22.9% indicated that their local economy was in a recession, or economic downturn,” said Ernie Goss, a professor at Creighton University’s College of Business, which produces the index.
Borrowing by farmers continued to decline in January. The borrowing index fell to 48.5 from December’s 50.0, its lowest level in seven years.
Bankers remain wary in their longer-term economic outlook, most likely because of the lack of a new North American trade deal and a trade agreement between the United States and China. This month’s confidence index, a reflection of bank CEO expectations for the economy six months out, grew to a “still weak” 50.0 from 45.8 last month, the survey said.
But that outlook could improve now that President Trump has signed a China trade agreement and the Senate has passed a new North American trade deal, said Goss, who expects a “boost [in] business confidence in the months ahead.”