High energy prices hinder economic growth in Midlands

High energy prices have led to languishing economic growth and continued job losses in 10 Midwestern and Plains states, according to a survey of rural bankers. The overall economic index for the region rose slightly to 47.5, from 46.3 in March, still weak and below the nearly two-year low of 50 measured in February.

An index over 50 represents economic growth; a score below 50 signals economic downturn. Farmers aren’t the only ones hurting from higher energy prices, according to the survey, which includes Nebraska. “Higher energy prices appear to be the culprit in the (index’s) downturn,” said Creighton University economics professor Ernie Goss. Goss and Bill McQuillan, chief executive officer of City National Bank in Greeley, Neb., created the monthly survey of rural bank presidents and chief executives.

“Any time there are abuses of the financial system by the large financial firms, community banks pay the price,” said Jim Stanosheck, CEO of State Bank in Odell, Neb. The farm equipment sales index was a strong 71.4 in April, down slightly from 72.5 in March but up from 64.3 in April 2007. The farmland price index stood at 71.3, down from March’s 78.1. Bank indicators were mixed for April. Farmers pushed loan volumes up, to 57.3 from 54.5 in March.