The Creighton University Rural Mainstreet Index declined in February, but remained above growth-neutral. This is the sixth straight month the reading has moved above growth-neutral, according to the monthly survey of bank CEOs in rural areas of a Midwest region dependent on agriculture and/or energy.      

The overall 10-state index for February declined to 51.6 from 55.9 in January. For Iowa, the February RMI sank to 50.1 from January’s 56.1, driven in part by job losses in rural areas of the state. 

Overall, “Due to weak farm income, 40.6% of bankers reported that their banks had restructured loans while only 3.1% indicated that their banks had rejected a higher percentage of farmland loans,” said Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. About one-fourth of bankers indicated no change in lending practices.

The Rural Mainstreet Index covers 10 regional states, focusing on about 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. 

Among the components of the index, the February farm equipment sales index increased to a weak 37.9 from January’s 35.0. This marks the 77th month that the reading has remained below growth-neutral 50.  

Borrowing by farmers remained weak for February. The borrowing index rose to 50.0 from 48.5 in January, which was its lowest level since February 2013. The checking-deposit index tumbled to 60.9 from January’s 76.5, while the index for certificates of deposit and other savings instruments plummeted to 50.0 from 60.3 in January.     

Confidence among rural bank CEOs surveyed was high, however. The confidence index, which reflects bank CEO expectations for the economy six months out, increased to a healthy 58.1 from January’s weak 50.0. February’s reading is the highest recorded since June 2013.

“The signing of the Phase 1 trade agreement with China and the USMCA boosted economic confidence across the region with expectations of higher international agriculture sales,” Goss said. “The last time Creighton recorded economic confidence this high was when grain prices were double today’s values in 2013.”

Iowa’s farmland-price index inched higher to 45.9 from January’s 45.3. Iowa’s new-hiring index for February slumped to 47.7 from January’s 57.2. Over the past 12 months, rural areas in Iowa have experienced job losses with employment growth at minus 1.2%, compared with a stronger addition of 0.7% for urban areas of the state.