A monthly index tracking the economy in rural areas of Colorado and nine other states has dropped to a three-year low.

The overall reading for the Rural Mainstreet Index fell for a third straight month. At 40.4, the latest reading remains below growth-neutral 50.

The overall reading for Colorado fell 16.5 points to 58.9.

Overall readings also declined in eight of nine other states, increasing only in South Dakota.

“This is the weakest recorded reading in more than three years — or since June 2020 shortly after the beginning of the pandemic — and points to weaker farm and non-farm economies,” said Ernie Goss, an economics professor at Creighton University in Omaha, Neb., who compiles the index.

A component of the index tracking confidence declined 2.9 points to 21.2, the lowest level since the monthly index began in January 2006. Goss said 58 percent of bankers responding to the survey upon which the index is based expect conditions to worsen over the next six months.

The new hiring component edged down a tenth of a point to 49.1 although job openings continue to exceed available applicants.

The home and retail sales component dropped 8.4 points to 32 as higher interest rates on mortgages curb home sales, Goss said.

The banking component dropped 19.8 points to 57.9. “Higher short-term interest rates produced by Federal Reserve rate hikes over the past year continue to pose a significant threat to community banks by expanding the cost of customer deposits while the rates on bank loans have not risen as significantly over the same time period,” Goss said.

Other components of the index increased, however. The component for farming and ranching land prices climbed 11.1 points to 66.7. The component for farm equipment sales rose 1.5 points to 49.5.

In Colorado, the new hiring component of the index advanced a point to 58.8 and the farm and ranch land price component increased 10.1 points to 73.2.

Goss said the export of agricultural products from Colorado expanded to $128.4 million for the first three quarters of 2023, an increase of more than 34 percent from the same span in 2022.