A monthly index tracking the economy in rural areas of Colorado and nine other states has retreated to its lowest level in nearly four years.

The overall reading for the Rural Mainstreet Index dropped 8.2 points to 38 in March. That’s below growth-neutral 50 and the lowest level since June 2020 and the midst of the COVID-19 pandemic.

The overall reading for Colorado fell 1.7 points, but at 68.3 remained the highest among the 10 states.

“Higher interest rates, weaker agricultural commodity prices and higher grain storage costs pushed the overall reading to its lowest level since the early months of the pandemic,” said Ernie Goss, an economics professor at Creighton University in Omaha, Neb., who compiles the index. He bases the index on the results of monthly surveys of bank executives in rural areas of a 10-state region.

In Colorado, the new hiring component of the index rose 4.4 points to 61, but the farm and ranch land component fell four-tenths
of a point to 62.9. According to the U.S. Bureau of Labor Statistics, employment in rural areas of the state grew 6.3 percent, compared to a seven-tenths of a percent gain in urban areas.

Across the region, the component of the index tracking confidence fell 4.4 points to 36.

A new hiring component rose 3.2 points to 52.2. Most bankers reported no changes in hiring since February.

The home and retail sales component rose 6.3 points, but at 41.7 remained weak. “Elevated mortgage rates and a limited supply of homes are sinking the home sales index below growth neutral in rural areas,” Goss said.

The loan volume component of the index jumped 13.2 points to 79.2.

The farming and ranch land prices component fell 1.7 points, but at 56 remained above growth neutral. But the farm equipment sales component tumbled 19.1 points to 30.4, the lowest reading since May 2020.