For a fourth straight month, the overall Rural Mainstreet Index, or RMI, sank below growth neutral, according to the December survey of bank CEO’s in rural areas of a 10-state region dependent on agriculture and/or energy. The region’s overall reading for December rose to 41.7 from 40.4 in November. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. Creighton University Economist Ernie Goss, says higher interest rates and a credit squeeze are having a significant and negative impact on rural mainstreet businesses.
Approximately 13.3% of bank CEO’s indicated that their local economy was already in a recession while another 43.3% expect a recession in early 2024. When asked to name the greatest 2024 economic threat for community banks, approximately four of 10 identified a downturn in farm income as the chief 2024 hazard.
The Kansas RMI for December dipped to 38.3 from November’s 39.6. The export of agricultural products from Kansas declined from $1.9 billion for the first ten months of 2022 to $1.1 billion for the same period in 2023 for a 43.6% slump.
