Bank CEO sentiments improved this month despite a lack of optimism, according to this Creighton University August rural mainstreet index..Released Aug. 20, the index increased to 50.3 from 42.1 in July, increasing above the growth-neutral score of 50 for only the second time in the past six months. Any reading higher than that mark signals positive sentiments, while anything under 50 shows pessimism. The survey tracks bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. Rural bankers remained pessimistic over economic growth over the next six months, with this month’s index falling to 31.6 from 34.2 in July. “Weak grain prices, higher input costs and volatility from the Iran war and tariff uncertainty continue to weigh on banker confidence,” said Ernie Goss, chair in regional economics at Creighton University’s Heider College of Business. More than half of bank CEOs said farm borrowers were in good condition. Forty-seven percent expect farm income to fall in the next 12 months. Thirty-six percent expect “little or no change in farm income” over the next 12 months, according to the report. The farm and ranchland prices index dropped below 50 for the first time since April, falling to 47.2 from 52.8 in July. The farm equipment sales index fell below 50 for the 36th straight month, dropping to 22.2 from 27.8. Bankers said farm equipment purchases were only a small percentage of ag lending, while real estate loans represented more than half of the overall number. “Though farm and ranchland values have been holding up much better than farm and ranching income, weak grain prices, lower farm liquidity and somewhat tougher credit standards have restrained growth in farmland values,” Goss said. According to the International Trade Association, regional exports of agriculture goods and livestock increased 7.3 percent during the first half of the year to $5.77 billion from $5.38 billion in the same period in 2024. Other report findings included:August’s loan volume index increased to 76.3 from 73.7 in July. The checking deposit index fell to 39.5 from 50.0 in July, while the regional index for certificates of deposits rose three points to 55.6. This month’s new hiring index remained at 50.1, even as the rural job market for ranches, farms and non-farm rural employers has been lackluster for several months. The vast majority of bankers reported not increasing hiring this month. The home and retail sales index fell to 42.1 from 44.7 in July amid low income from grain and increasing input costs. The regional retail sales index fell a half-point to 41.1.
