The Creighton University Rural Mainstreet Index remained weak with a reading below growth neutral for the 18th straight month, according to the monthly survey of bank CEOs in rural areas of a ten state region in the Midwest, including Kansas.
“I guess we could say negatives are getting less negative,” said Creighton economist Ernie Goss. “The index is still below growth neutral. Most of the bankers are reporting contracting economic conditions.”
However, the contracting has slowed compared to previous months, thanks to increased strength in the region’s main sector.
“We have a bit of improvement in agricultural commodity prices,” said Goss. “Things are stabilizing. We’re seeing most of the factors that we survey on are looking a little bit better, or perhaps I should say, not as bad.”
Has the rural recession hit bottom? That’s tough for Goss to say.
“I think we probably have,” said Goss. “We probably did in October or so of 2016. Things have been inching up, but there’s still a lot of pain out there. What we’re seeing is the urban areas are doing pretty good and the businesses in the urban areas. It’s the rural areas where we’re still seeing pain.”
Goss says that agriculture and energy are still keeping the rural Midwest behind its neighbors for now, but in the long term, he expects improvement. The confidence index, which reflects expectations for the economy six months out, improved to a weak 45.7 from 42.7 in January. Fifty in any aspect of the survey is growth neutral.