The economy continues to grow in rural parts of 10 Plains and Western states, according to a new monthly survey of bankers in the region, but some bankers in the region are worried that worsening drought could threaten their operations.
The overall Rural Mainstreet economic index dropped slightly in August to 65.3 from July’s 65.6. Any score above 50 suggests a growing economy, while a score below 50 suggests a shrinking economy.
The survey showed nearly 16% of bankers believe that continuing drought conditions are the greatest threat to their banking operations over the next year. More than 40% of bank CEOs see low farm loan demand — due to strong farm finances, according to the report — as their bank’s greatest challenge over the next year.
Bankers were less optimistic about the economy over the next six months than the previous month, with August’s confidence index dropping to 59.7 from July’s 65.6.
“Rising COVID-19 infections, the turmoil in Afghanistan and negative views of current infrastructure bills before Congress damaged the economic outlook of bank CEOs,” said Creighton University economist Ernie Goss, who oversees the survey. “Only 9.4% of bankers support passage of the $3.5 trillion infrastructure bill currently winding through Congress.”
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed.
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