Banker confidence stymied by interest rates, input costs

High interest rates and input costs continue to constrain banker confidence this month, according to Creighton University's regional monthly survey of bank CEOs in rural areas of a 10-state region. .March’s Rural Mainstreet Index increased to 41.1 from 38.0 in February, the 18th time in 19 months it has fallen below the growth-neutral mark of 50. Rural bankers continued to lack confidence in economic growth for their area over the next six months, with the related index falling to 30.4 from 40.0 in February. Farmland prices fell for the 10th time in 11 months, according to the report, with the related index dropping to 38.9 from 40.0 in February. The vast majority of farmers do not expect farm income to increase this year, with 63 percent anticipating a decline. Farm equipment sales fell for the 19th straight month amid high input expenses, tougher credit conditions and relatively weak grain prices. The related index increased to 20.8 from 18.2 in February. “The economic outlook for 2025 farm income remains weak, according to bank CEOs,” said Ernie Goss, chair in regional economics at Creighton University’s Heider College of Business. “However, farm commodity prices have recently improved, but not enough for profitability among a high share of producers.”Regional exports of agriculture goods and livestock fell 14 percent in the first month of this year to $964.3 million, according to the International Trade Association, with Mexico accounting for 45 percent of such exports. Eighty-five percent of bankers supported renewing the 2017 Tax Cuts and Jobs Act passed during the first term of the Trump administration, with 25 percent backing a reduction in the corporate income tax rate to 15 percent from 21 percent. Seventy percent of bankers support Trump taking a relatively flexible approach to tariffs, according to the survey. Less than 8 percent want Trump to enact heavier tariffs he proposed in January on Canada, China and Mexico. States in the survey include Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming, Other report findings included:March’s loan volume index increased to 77.8 from 60.4 the previous month. The checking deposit index fell to 50.0 from 58.7 in February, while the index for certificates of deposits and other savings instruments fell to 55.6 from 62.5 in February. The new hiring index increased to 53.7 from 43.5 in February as job gains for non-farm employers more than made up for weakness among farm producers.The home sales index inched up to 42.6 from 40.0 in February, while the regional retail sales index increased to 40.4 from 28.3 in February.