A survey of rural bankers in 10 Midwest and Plains states released Thursday showed signs of promise amid prolonged financial weakness in the agriculture industry.
The overall index for the Rural Mainstreet economic report fell to 44.2 in April from 47.4 in March. The April 2009 index was 21.7.
The index ranges between 0 and 100. A score below 50 suggests the economy will contract in the next few months; above 50 indicates the economy will expand.
The index has remained below 50 for 26 consecutive months, said survey organizers Ernie Goss, a Creighton University economist, and Bill McQuillan, CEO of CNB Community Bank of Greeley, Neb.
"While the negatives are clearly getting less negative as the agricultural economy improves, urban economies in the area are outperforming the rural," they said in news release.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
The monthly confidence index, which tracks bankers' economic outlook six months out, rose for the second straight month, from March's 54.3 to 60.2.
Bankers appeared to be encouraged by prices for farmland and cattle. The April farmland-price index rose above neutral growth for the third consecutive month, to 59.5 from 58.2 last month and 41.2 a year ago.
Michael Johnson, chief executive officer of Swedish American State Bank in Courtland, Kan., said 800 acres recently sold at an all-time high, and Larry Rogers of Utica, Neb.-based First Bank reported a 143-acre farm sold for $8,025 an acre.
The farm equipment-sales index also rose in April, to 57.2 from March's 41.4.
"We are tracking significant improvements in farm and ranch land prices and farm equipment sales," Goss said. "I expect both of these factors to remain healthy in the months ahead."
April's loan volume index of 61.1 rose from 55.2 last month.
The home-sales index soared to 52.5 from 46.5 in March and 37.5 in February. Goss credited the approaching deadline for first-time home buyers to qualify for a tax credit.
However, Dale Bradley, CEO of Citizens State Bank in Miltonvale, Kan., predicted more home foreclosures ahead. He said that would hinder recovery in the housing sector.
The new-hiring index rose from 45.7 in March to 46.7.