Colorado rural index declines

Ernie Goss

A monthly measure of the rural economy in Colorado has declined in part on decreasing employment. 

The Creighton University Rural Mainstreet Index for Colorado retreated 1.3 points to 41.6 for January.

The overall Rural Mainstreet Index for a 10-state region that includes Colorado rose four-tenths of a point to 52, the second-highest reading since January 2020 and the onset of the coronavirus pandemic.

“Recent sharp improvements in agriculture commodity prices, federal farm support payments and the Federal Reserve’s record low short-term interest rates have underpinned the rural main street economy in a solid and positive growth range. However, the rural economy remains well below pre-pandemic levels,” said Ernie Goss, an economics professor at Creighton University in Omaha, Neb., who calculates the index.

The index ranges from 0 to 100, with readings above 50 reflecting growth. The index is based on the results of monthly surveys of bank chief executive offers in rural areas dependent on the agriculture and energy industry sectors. The index focuses on economic conditions in about 200 rural communities with an average population of 1,300.

For January, the index increased in eight states and decreased in two states.

In Colorado, a component of the index tracking hiring fell nearly five points to 41.8. Over the past year, nonfarm employment in rural areas of the state has declined 12.5 percent, compared to a 3.8 percent loss in urban areas. A component of the index tracking prices for farm and ranch land rose six-tenths of a point to 51.1.

The overall Rural Mainstreet Index for the region reflected a fourth consecutive month of readings above growth-neutral 50 for farm land prices. A reading tracking farm equipment sales rose to its highest level since April 2013.

At the same time, though, a component of the index tracking new hiring fell four points to 46 in December. Nonfarm employment in rural areas of the 10-state region has declined 3.3 percent from
pre-pandemic levels and 5.6 percent from a year ago.

“It will take many months of above growth-neutral readings to get back to pre-COVID-19 employment levels for the region,” Goss said.

A component of the index tracking home sales fell 11 points in January, but at 60 remained above growth-neutral. A component of the index tracking retail sales fell 1.4 point to 40.6.

“Online buying and business closures linked to COVID-19 continue to harm the region’s retailers,” Goss said.

A component of the index tracking the expectations of bank CEOs for six months ahead fell 2.9 points, but remained at 60.

“Federal farm support payments, improving grain prices and advancing exports have supported confidence, offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” Goss said.