The nation's rural economy continued its struggles for the 15th consecutive month, according to the rural mainstreet index (RMI) tabulated by Creighton University. Analysts expressed cautious optimism about the report.
The RMI, which is based on surveys of bank CEOs in 11 rural states, expanded to 36.2 this month from 21.7 in April and 18.7 in March. An RMI below 50 indicates negative growth.
"The rural mainstreet economy appears to have bottomed out earlier this year with fewer negative indicators each month since February," said Creighton University economist Ernie Goss.
Weaker farm income, significant reductions for rural manufacturers and a weak U.S. economy continue to negatively affect the rural economy, Goss said.
A weaker outlook for farm income has negatively affected businesses that sell to the farm sector, including manufacturers of tractors and other farm equipment. "Cautious farmers have clearly cut their purchases of farm machinery," said Goss.
Jim Brown, CEO Hardin County Savings Bank in Iowa, said things were far worse in the 1980s. He and other bankers expressed more optimism in the survey.
For the first time since September 2007 the RNI confidence index, which tracks bankers' expectations for the economy six months out, rose above 50.0.