Midwest bankers see little harm from government shutdown
Friday, October 18, 2013 3:13 PM
Nearly three-quarters of the bankers surveyed in about 200 rural Midwest communities said the 16-day partial federal government shutdown had little negative impact on their local economies, according to the Rural Mainstreet Economy's October report.
About a quarter of those surveyed said they did see a negative economic impact. The bankers were asked about the effects of the shutdown, in addition to monthly questions about the farm economy, banking, hiring, home sales and retail sales, and overall confidence in the economy.
The overall Mainstreet index for the 10 rural states rose in October, for the first time since June, from 52.4 to 54.3. The index in Iowa also climbed a couple of points, from 53.4 to 55.3. An index score of 50 represents neutral growth.
"While the overall index is up for the month, I still expect growth in the Rural Mainstreet Economy to be slower in the months ahead. Agriculture commodity prices for select products have declined significantly and are approaching break-even for some producers," said Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University and one of the creators of the Rural Mainstreet Index.
Overall, farmland prices continue to decline across the Midwest, but in Iowa, James Brown, president of Hardin County Savings Bank in Eldora, reported a record sale of 80 acres in Grundy County last week at $17,600 an acre, said Goss.
Midwest bankers predicted that farmland rents would grow by only 2.5 percent in the coming year, down from the 9.3 percent expected growth reported six months earlier.
Hiring jumped in October, an unexpected but encouraging turn, said Goss, but bankers' overall confidence in the economy remained unchanged from last month.
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