OMAHA, Neb. (AP) — The economy in rural areas of 10 Midwest and Plains states appears to be slowing down as concerns about the nation's financial health grow, according to a new monthly survey of bankers released Thursday.
The overall Rural Mainstreet index for the region dipped below 50 for the first time this year, hitting 49.3 in August. Anytime that index, which ranges from 0 to 100, is below 50, it suggests the economy will contract.
Even though farm income remains healthy, rural businesses aren't hiring many workers and the bankers are losing confidence in the economy, said Creighton University economist Ernie Goss, who oversees the survey. The jobs index stayed at 49.3 in August, and the confidence index fell to 44 from July's 55.
Goss said about 35 percent of the bankers surveyed believe the U.S. economy will fall back into recession by the end of 2011.
"The Rural Mainstreet economy is clearly slowing down," Goss said.
Bankers in rural parts of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
The regional farmland price index increased to 61.9 in August from July's 59.4. And the farm equipment sales index increased to 56.9 in August from July's 53.7.
"A weak economy and significant economic volatility have encouraged nonfarm investors to buy nonfinancial assets including farmland. This continues to be an important component of farmland price growth," Goss said.
Home sales in the region slowed and the index for that declined to 49.3 in August from July's 51.4. The retail sales index also weakened in August to 47.3 from July's 47.9.
The August index also showed that bank loan volume declined to 62.1 in August from 66.4 in July, while the checking deposit index increased to 55.4 from July's 52.8. The savings index dropped to 40.2 in August from July's 43.7.