Midwest, Plains bankers worried about energy costsOMAHA, Neb. — Rising energy prices appear to be slowing economic growth in rural areas of 10 Midwest and Plains states, according to a monthly survey of bankers in the region.
OMAHA, Neb. — Rising energy prices appear to be slowing economic growth in rural areas of 10 Midwest and Plains states, according to a monthly survey of bankers in the region.
The overall Rural Mainstreet index remained in positive territory but declined in May to 54.9 from April’s 59.4. Anytime the index, which ranges from 0 to 100, is over 50, it suggests the economy will expand over the next six months.
Bankers in rural parts of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
“Bankers remain concerned about the level and growth in energy prices. Given the importance of energy prices to agriculture, any significant increase in oil prices would certainly reduce business confidence,” said Creighton University Ernie Goss, who oversees the survey.
But the bankers still appear optimistic. The survey’s confidence index rose to 63.7 in May from April’s 61, suggesting the bankers still expect economic growth over the next several months.
The region continued to add jobs in May. The jobs index declined to 54.2 in May from April’s 56.9.
Goss said businesses linked to agriculture or international markets are experiencing healthy growth.
“Rural Mainstreet companies that are not tied to the farm economy and dependent on the domestic economy continue to experience a much slower expansion,” Goss said.
The farmland price index slipped from April’s 77.6 but remained at a high 75 in May.
The farm equipment sales index declined to 65.9 in May from 74.2 in April.
The home sales index stayed in positive territory but declined in May to 54.3 from April’s 55.2.
The retail sales index remained unchanged in May at a weak 50.1. Goss said higher fuel prices are hurting retail sales.
The loan volume index slipped to 55.5 in May from April’s 58.1. The checking deposit index declined to 58.2 in May from 65.5 in April. And the index for certificates of deposit and other savings instruments also declined to 44.6 in May from April’s 48.5.