A survey of rural bankers in 10 Midwest and Plains states released Thursday indicates a setback in the recovering economy.
The overall index for the Rural Mainstreet economic report dropped to 49.3 in July from 52.6 from the previous month. The index ranges between zero and 100. A score below 50 suggests the economy will contract in the next few months; above 50 indicates the economy will grow.
The index had been above 50 since April, breaking a 26-month streak below that mark.
"Much like other economic indicators from across the nation, our survey is signaling slowing in economic progress," said survey organizers Ernie Goss, a Creighton University economist, and Bill McQuillan, chief executive of CNB Community Bank of Greeley, Neb. "However, surveys over the past several months show an economy that has improved significantly from last year at this time."
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed for the report.
The monthly confidence index, which tracks bankers' economic outlook six months out, dropped for a second straight month to 52.4. It had been 56.1 in June and 63 in May.
"There are many economic bumps in the road before we see progress in the U.S. economy," said Dale Bradley, chief executive of Citizens State Bank in Miltonvale, Kan.
The survey reported a slight dip in the two farm indicators. The farmland-price index was 52.5, down from June's 54.7. The farm equipment-sales index slipped to 51.8 from 53.1 in June.
"The farm economy has clearly improved from last year and we are seeing that reflected in farmland prices. However, the strengthening of the U.S. dollar, which has dented farm commodity prices, has slowed the growth in farmland prices," Goss said.
All three bank indicators — loan volumes, checking deposits and CDs — were at or above 50 for a fifth straight month.
Bankers reported a steep drop in home sales, with the July index falling to 41.7 from 56.3 in June.
The new-hiring index fell to 45.4 from June's 50.9, while the retail-sales index dropped to 41.7 from 52.6.
Creighton University economic surveys: http://www2.creighton.edu/business/economicoutlook
© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.