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Economic Outlook

Recent Survey Results

Mid-America Economy Signals Rising Risk of 2023 Recession:
Wholesale Inflation Gauge Falls to 32-Month Low

December Survey Highlights:

• For the first time since the early days of the pandemic in May 2020, the overall index, or business barometer, plummeted below growth neutral for a second straight month, pointing to higher recession risk for 2023. 
• The regional wholesale inflation gauge fell to a 32-month low. 
• The overall index, or business barometer, has now fallen seven of the past nine months. 
• Approximately 60% of supply managers expect the economy to slump into a recession in 2023. 
• 2022 region-in-review, top-to-bottom economic performers: No. 1 South Dakota, No. 2 Minnesota, No. 3 Nebraska, No. 4 Kansas, No. 5 Oklahoma, No. 6 Iowa, No. 7 Missouri, No. 8 North Dakota and No. 9 Arkansas. 
• Due to labor shortages, approximately 63% of firms with job openings reported shortages of applicants.
• Compared to pre-pandemic levels, the current regional labor force remains down by approximately 213,000 workers, or 1.5%.

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Rural Mainstreet Economy Begins 2023 on Solid Note:
Bank CEOs Rank Higher Input Prices as Greatest Farm Threat 

January 2023 Survey Results at a Glance:

• After six consecutive months of below-growth-neutral readings, the region’s overall economic reading rose above the growth-neutral threshold for a second straight month.
• In terms of 2023 threats to farms in their area, bank CEOs ranked higher input prices as the greatest threat, followed by higher interest rates.  
• In terms of 2023 threats to rural bankers, bank CEOs ranked low loan demand as the greatest threat to rural banks, followed by rising regulatory costs.
• Farmland prices continued to expand. 
• Despite higher interest rates, solid farm income pushed farm equipment sales higher. 

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