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A monthly survey of bankers in the rural Midwest showed continued to show “significant economic weakness,” the 18th month the Rural Mainstreet economy index has shown a troubled economy. The Rural Mainstreet index, operated by economists at Creighton University, appeared to bottom out in February of this year, but the last three months have shown declining prospects. The university economists survey bankers in more than 200 small towns in 11 Midwestern states. In this survey, the bankers were asked about upcoming crop yields. More than three out of five bankers expect crop yields to be “significantly up” from last year — but lower commodity prices will mean that farm income will be down.
Most of the bankers (83%) said the “cash for clunkers” car rebate program had had little or no impact on car sales in their communities. Hiring also remained weak. “Over the past 12 months, rural areas of the region have lost almost 5 percent of their jobs,” said Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton.
Retail sales were up slightly in August over July in these more than 200 rural communities. Home sales volumes were lower this August compared to a year ago. Kurt Henstorf, president of the First National Bank in Shenandoah, Iowa, said, “Home sales seem to be improving, but our commercial sector remains steady in the doldrums.”