After rising to growth neutral for two straight months, the Creighton University Rural Mainstreet Index fell below the 50.0 threshold for July, according to the latest monthly survey of bank CEOs in 10 Midwestern states.
The index, which ranges between 0 and 100, tumbled to 40.7, its lowest level since November of last year, and down from 50.0 in June. Organizer Ernie Goss says drought conditions and weak grain prices are to blame, as they have attributed negatively to economic conditions. For the month, the July farmland and ranchland-price index sank to 36.6 from June’s 40.0.
The July farm equipment-sales index fell to 20.0 from 26.2 in June. Borrowing by farmers was very strong for July as the loan-volume index climbed to 81.5, the second highest reading on record, and up from 78.3 in June.
Finally, the confidence index, which reflects expectations for the economy six months out, slumped to a weak 38.4 from 48.9 in June, indicating a continued pessimistic outlook among bankers.