CORONAVIRUS

Rural Mainstreet Index at pre-pandemic levels

Bars, restaurants taking greatest coronavirus impact

Already showing signs of distress in early September from drought since late July, Jason Fagle's 100 acres of corn near
Already showing signs of distress in early September from drought since late July, Jason Fagle’s 100 acres of corn near Midway was further damaged by the Aug. 10 derecho. (Cliff Jette/Freelance)
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An economic index based on a survey of bankers in Iowa and nine other Midwest states dependent on agriculture and/or energy rose this month to its highest level since January.

The Creighton University Rural Mainstreet Index climbed to 53.2, from 46.9 in September. A reading above 50 indicates an expanding economy.

The index has increased for six straight months after falling to a record low in April.

More than eight of 10 bank CEOs identified bars and restaurants as experiencing the greatest negative effect from COVID-19.

Only 3 percent of bankers named farmers as experiencing the greatest negative COVID-19 impacts.

“Recent improvements in agriculture commodity prices, federal farm support and the Federal Reserve’s record low interest rates have underpinned the rural mainstreet economy,” said Ernie Goss of Creighton University’s Heider College of Business.

“Still, more than one-third, or 35.5 percent, of bank CEOs reported their local economies were experiencing recessionary economic conditions.”

The October farm equipment sales index increased to 37.9 from 32.1 in September. The bankers estimated that farm equipment sales will fall by an additional 3.1 percent over the next 12 months.

The new hiring index was unchanged from 54.8 in September.

Data from the U.S. Bureau of Labor Statistics indicate that nonfarm employment levels for the rural mainstreet economy are down by 169,000 — non-seasonally adjusted — or 3.9 percent compared to pre-coronavirus levels.

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“It will take many months of above growth neutral readings to get back to pre-COVID-19 employment levels for the region,” Goss said.

The confidence index, which reflects bank CEO expectations for the economy six months out, improved to 51.6 from 50.0 in September.

“COVID-19 related farm support payments and improving grain prices have boosted confidence offsetting pessimism from the impact of the pandemic,” said Goss.

The home-sales index slipped to a strong 72.6 from 75.0 in September. The retail-sales index for October increased to a frail 46.8 from September’s 43.8.

“Higher unemployment and business closures linked to COVID-19 continue to harm the region’s retailers,” Goss said.

The October Rural Mainstreet Index for Iowa climbed to 52.3 from 46.5 in September.

Iowa’s new-hiring index for October inched up to 54.9, from 54.7 in September.

Compared to the same month last year, Iowa’s rural mainstreet economy has lost 6.4 percent of its nonfarm employment, representing 43,000 jobs.

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