Economic Outlook
Recent Survey Results
Mid-America Manufacturing Growth Slows with Higher Prices
Tariffs Pushing Input Prices Higher
May 2025 Survey Highlights:
• The overall Mid-America Business Conditions Index declined for the month but remained above growth neutral for the fifth straight month.
• Approximately one-third of manufacturers reported switching input providers due to tariffs, or the threat of tariffs.
• The May regional manufacturing employment index remained below growth neutral.
• More than half of supply managers reported that tariffs and impending tariffs have pushed prices higher for production inputs.
• As indicated by a supply manager in the May survey, “Tariffs are being used as a means to increase prices regardless of whether they are applicable or not.”
• As a result of slowing growth, Goss expects a cut in short-term interest rates at the Federal Reserve’s next meetings on June 17/18.
• According to U.S. International Trade Administration (ITA) data, the regional economy exported $23.4 billion in manufactured goods for the first quarter of 2025, compared to $23.7 billion for the same period in 2024, for a 1.4% decline.
Rural Mainstreet Economy Remains Weak
95% of Bankers Support Continuing 2017 Tax Cuts
May 2025 Survey Results at-a-Glance:
• The overall Rural Mainstreet index fell below growth neutral 50.0 for the 20th time in the past 21 months.
• For the 12th time in the past 13 months, farmland prices sank below growth neutral.
• Farm equipment sales dropped below growth neutral for the 21st straight month.
• Federal Reserve interest rate policies have boosted CD purchases above growth neutral for 30 straight months.
• Approximately 68% named lower ag commodity prices as the number one farming threat, while 23.5% indicated higher tariffs as the top risk factor.
• According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for the first quarter of 2025, compared to the same 2024 period, fell from $3.4 billion in 2024 to $2.7 billion in 2025 for a decline of 19.3%.
• For Q1, 2025, Mexico was the top destination for regional ag exports, accounting for 50.6% of total regional agriculture and livestock exports.
