Decreasing farm income is leading to not only a drop in confidence, but also a decline in the sale of farm equipment.
According to the most recent Rural Mainstreet Index (RMI) from Creighton University, the rural economy did make a slight gain during the October survey. The index rose from 36.5 in September to 37.5 for October.
Ernie Goss, an economist at the university, noted that the RMI has remained below 50 for 20 consecutive months. In order to compile the index, the university polls the CEOs of banks in 11 states. The scale runs from zero to 100, with a mark of 50 being neutral. An index above 50 indicates growth in the rural economy.
"The decline in farm income continues to weigh on the rural, agriculturally-dependent economy with few signals that the economic downturn is coming to an end," Goss said.
The university's index for farm equipment showed that sales fell from 38.6 in September to 36.7.
The Federal Reserve recently reported that the production of industrial equipment, which includes farm equipment, fell by 0.6 percent during September. The Fed reported that construction supplies also fell, dropping 0.4 percent during the month. Overall, industrial production increased by 0.7 percent in September.