The Rural Mainstreet Index climbed above growth neutral this month. The monthly survey of bank CEO’s in ten Midwestern states climbed to 54.8 from 53.8 in July. The index ranges between 0 and 100 with 50.0 representing growth neutral.
Organizer Ernie Goss of Creighton University says the survey shows expansion of the economy outside of agriculture, but adds, “The negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices.”
In reaction to weak farm commodity prices and income, 31 percent of bank CEOs reported rejecting a higher percentage of farm loans. More than half, or 54.8 percent, indicated raising collateral requirements, while 4.8 percent reported reducing the size of farm loans.
August farm equipment sales sub-index fell to 37.8 from July’s 38.8. This marks the 60th consecutive month the reading has moved below growth neutral. In terms of the sale of farm equipment over the next 12 months, bankers expect sales to decline by 7.8 percent.