OMAHA, Neb. – An index of economic conditions in 10 Midwest and Western states jumped this month after three months of drought-induced doldrums.
According to a report released Thursday, the overall Rural Mainstreet index rose to 56.6 for October from 48.3 in September. It was the first time since June that the index rose above growth neutral 50.
Survey organizers have said that any score above 50 on the 100-point scale suggests the economy will grow in the months ahead.
“Our survey indicates that the negative impacts of the drought are being more than offset by the positives of very strong incomes from high agriculture and energy prices,” said Creighton University economist Ernie Goss. He oversees the survey of rural bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
The confidence index, as measured by the bankers’ responses, rose to 50.7 from 43 in September. The index reflects expectations for the economy six months out.
“As the Rural Mainstreet economy turned upward for the month, so did [the] bankers’ outlook,” said Goss. “The turnaround in the housing market is an important factor boosting economic confidence,” he said.
The survey’s October home sales index advanced to a healthy 59.8 from September’s 58.8.
The bankers were asked whether they expected the country to return to a recession next year.
One in four bankers said they thought a recession was likely or very likely in 2013, but almost a third of those who responded said they thought a recession was unlikely or very unlikely.
Casey Regan, CEO of Premier Bank in Farmington, Minn., said economic forecasting for next year, “especially business owner sentiment, will depend greatly on the results of what happens on the first Tuesday of November.”