Bankers survey shows signs of rebounding economyOMAHA, Neb. — A survey of rural bankers in 10 Midwest and Plains states released Thursday showed signs of a rebounding economy. The overall index for the Rural Mainstreet economic report jumped to 54.3 in May from 44.2 the previous month. The May 2009 index was 36.2.
OMAHA, Neb. — A survey of rural bankers in 10 Midwest and Plains states released Thursday showed signs of a rebounding economy.
The overall index for the Rural Mainstreet economic report jumped to 54.3 in May from 44.2 the previous month. The May 2009 index was 36.2.
The index ranges between 0 and 100. A score below 50 suggests the economy will contract in the next few months; above 50 indicates the economy will expand.
The index had been below 50 for 26 consecutive months, said survey organizers Ernie Goss, a Creighton University economist, and Bill McQuillan, CEO of CNB Community Bank of Greeley, Neb.
Still, some bankers appeared skeptical about the economy being healthier.
“It seems as though the weaknesses are a little more pronounced than they have been,” said Larry Rogers, president of First Bank of Utica in Nebraska.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
The monthly confidence index, which tracks bankers’ economic outlook six months out, rose for the third straight month, from April’s 60.2 to 63.
Bankers reported an uptick in home sales as federal tax credits for first-time buyers expired at the end of April. The index rose to 58.8 from April’s 52.5.
Some bankers, though, were less optimistic about the housing market’s future.
“I still feel that mortgage foreclosures have not hit bottom and will show more problems for the economy this summer,” said Dale Bradley, CEO of Citizens State Bank in Miltonvale, Kan.
Bankers indicated continued improvement in farmland prices, with the index rising above neutral growth for a fourth straight month to 52.7, although down from April’s 59.5.
Farm and ranch prices had been falling since spring 2008, but 15 percent of bankers reported in May gains of 5 percent or more in rental rates and 23 percent reported gains of 1 to 4 percent. Just over 55 percent of bankers reported no change.
The farm equipment-sales index fell in May, to 50.9 from April’s 57.2. The index in May 2009 was 28.3.
The new-hiring index also showed signs of improvement, rising to 56.1 from 46.7 in April. The index had been below 50 for 28 straight months.
And for a third straight month, all three bank indicators — loan volumes, checking deposits and CDs — were at or above 50.