Rural Bankers: Worst is behind us
Creighton University’s Rural Mainstreet Index, (RMI) for June suggests the Midwest economy remains weak, but regional bankers believe the worst of the economic downturn has passed.
The overall Area Economic Index slipped to 34.0 from 36.2 in May. The index, which measures the economic health of smaller towns and rural areas, declined in June after increasing for three consecutive months.
Creighton University economist Ernie Gross said, "The RMI has remained below growth neutral for 16 consecutive months. Even though the RMI was down for June, the index has been trending upward over the past few months, indicating the severity of the economic downturn is lessening. Weaker farm income, closures and cutbacks for rural manufacturers and a weak U.S. economy continue to negatively affect the Rural Mainstreet economy."
The Confidence Index, which represents banker’s and Bank CEO’s confidence in the economy six months out, slipped to 52.2 from 56.0, but still remains in positive territory above 50.0. "Despite the decline in the confidence index, bankers in our survey clearly think that the worst of the economic downturn is behind us," said Goss.
The Farmland Price Index moved below growth neutral for the eighth consecutive month. Gross noted that "After peaking at 81.0 in January 2008, the farmland-price index declined to a record low 33.1 in March of this year. It has since rebounded to this month’s reading of 45.7 from May’s 39.2. The farm-equipment sales index climbed to 33.3 from May’s record low 28.3."
Despite weak economic conditions, community bankers reported healthy banking numbers for June. The loan-volume index expanded to 56.1 from May’s 46.7, which indicates a substantial expansion of credit availability. According to Bill McQuillan, CEO of City National Bank, "We certainly have plenty of dollars to lend to qualified buyers who are seeking financing."
The RMI indexes are comprised of bank CEOs and presidents of a 10-state area. There are about 1,300 bankers surveyed each month.
- Colvin
The overall Area Economic Index slipped to 34.0 from 36.2 in May. The index, which measures the economic health of smaller towns and rural areas, declined in June after increasing for three consecutive months.
Creighton University economist Ernie Gross said, "The RMI has remained below growth neutral for 16 consecutive months. Even though the RMI was down for June, the index has been trending upward over the past few months, indicating the severity of the economic downturn is lessening. Weaker farm income, closures and cutbacks for rural manufacturers and a weak U.S. economy continue to negatively affect the Rural Mainstreet economy."
The Confidence Index, which represents banker’s and Bank CEO’s confidence in the economy six months out, slipped to 52.2 from 56.0, but still remains in positive territory above 50.0. "Despite the decline in the confidence index, bankers in our survey clearly think that the worst of the economic downturn is behind us," said Goss.
The Farmland Price Index moved below growth neutral for the eighth consecutive month. Gross noted that "After peaking at 81.0 in January 2008, the farmland-price index declined to a record low 33.1 in March of this year. It has since rebounded to this month’s reading of 45.7 from May’s 39.2. The farm-equipment sales index climbed to 33.3 from May’s record low 28.3."
Despite weak economic conditions, community bankers reported healthy banking numbers for June. The loan-volume index expanded to 56.1 from May’s 46.7, which indicates a substantial expansion of credit availability. According to Bill McQuillan, CEO of City National Bank, "We certainly have plenty of dollars to lend to qualified buyers who are seeking financing."
The RMI indexes are comprised of bank CEOs and presidents of a 10-state area. There are about 1,300 bankers surveyed each month.
- Colvin
Posted by Colvin & Co. at 6/23/2009 7:00 AM 
Categories: Farmland
Tags: agriculture commodities farmland
Categories: Farmland
Tags: agriculture commodities farmland
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