Rural economy survey shows growth in Nebraska, Iowa, but overall decline in Midwest
Source: By Steve Jordon, Omaha World Herald • Posted: Monday, January 23, 2017
According to a monthly Creighton University survey of 170 bankers in the states, the overall economy in the states declined for the 17th straight month.
But five of the states — Illinois, Iowa, Missouri, Nebraska and South Dakota — showed economic growth, while Colorado, Kansas, Minnesota, North Dakota and Wyoming showed declines.
Creighton economist Ernie Goss, who conducts the survey, said although farm prices are down from a year ago, there are factors that are helping rural areas in some of the states. “The negatives are not as negative.”
Demand and production of ethanol and biodiesel have helped Nebraska and Iowa, and investments in wind energy projects in Iowa have helped, too, Goss said. South Dakota’s banking industry, which employs people in both rural and urban communities, has been helped by a general upturn in financial services.
Goss said he wasn’t sure why the economic indicator for Illinois showed a sharp turnaround, although the survey results can be more volatile at the state level because the number of surveys returned can be small.
He said the general direction of the rural economy in the region may not be clear for several months because of changing conditions in the states. Still, low commodity prices remain a problem, down 7.3 percent for livestock and 11.7 percent for grains.
For the entire region, the survey’s Rural Mainstreet Index was 42.8, a slight change from 42.9 in December. Indexes below 50 show decline, above 50 show economic growth. Indexes for farmland prices, farm equipment, retail business and the outlook for the coming six months also were in the decline zone.
But individual state indexes were as high as 63.2 in Illinois, up from its December index of 34.2. Job growth in Illinois’ rural areas over the past year has been stronger than its urban job growth.
Nebraska’s index was 52.6 in January, up from 51.4 in December, Goss said. The state’s farmland price index was 37.7, up from 29.6, and its hiring index was 56.1, down from 56.7. Over the past year, Nebraska’s rural jobs grew by 0.7 percent and its urban jobs by 1.3 percent.
Iowa’s index was 50.2, down from 63.5 in December. Its farmland index was 48.6, down from 49.3, and its hiring index was 60.1, down from 63.9. Iowa has gained 0.4 percent in rural jobs and 0.8 percent in urban jobs over the past year.