An index of the Rural Mainstreet economy declined in June and continues to indicate significant economic weakness, according to the June survey of bank CEOs in an 11-state region by Creighton University.
The Rural Mainstreet Index (RMI), which ranges between 0 and 100, slipped to 34 from 36.2 in May. A reading of 50 is considered growth neutral.
"Weaker farm income, closures and cutbacks for rural manufacturers and a weak U.S. economy continue to negatively affect the Rural Mainstreet economy," said Creighton University economist Ernie Goss.
RMI has remained below growth neutral for 16 consecutive months. Even though the RMI was down for June, the index has been trending upward over the past few months, indicating the severity of the economic downturn is lessening.
With net farm income under pressure, both land prices and sales of farm equipment have weakened over the past several months. The farm-equipment sales index dropped below growth neutral for the ninth consecutive month, although the index climbed to 33.3 from May's record low 28.3, Goss said.
Despite the current negative economic circumstances, the confidence index, which tracks expectations for the Rural Mainstreet economy six months out, was above growth neutral for a second straight month.