Bankers Survey Shows NAFTA Worries Weighing Heavily on Rural Economy
January 22nd, 2018
Earlier this month, Creighton University published its most recent monthly Rural Mainstreet Index and the results continue to reflect strong concern amongst rural bankers for the Midwest’s economic outlook. The index dropped from 47.8 in December to 46.8, with 50 being growth neutral and results below that indicating economic decline. The survey’s confidence index, which shows the six-month outlook, is even less encouraging. Confidence amongst the 180 bankers who responded to the survey fell from 51.2 in December to a dismal 46.7 in January.
Ernie Goss, a Chair in Regional Economics at Creighton University’s Heider College of Business, expressed that America’s Heartland continues to face a troubling economic downturn, and anxieties about the future of the North American Free Trade Agreement (NAFTA) are compounding the Midwest’s disconcerting economic outlook. Goss commented,
“Concerns about trade, especially current NAFTA negotiations, and low agriculture commodity prices continue to restrain bankers’ economic outlook. Approximately 71.2 percent of bankers projected that any interruption or abolition of NAFTA would have a negative impact on their area.”
The fact that more than seven in 10 bankers expect a NAFTA withdrawal to have serious ramifications for U.S. agriculture should send a signal to the White House that struggling American farmers depend on NAFTA to keep their heads above water. NAFTA has been a boon to the rural Midwest and for an administration that campaigned on being a champion of agriculture, their position on NAFTA should be one of strengthening and modernizing, not diminishing or destroying.
Farmers in the Midwest are currently battling against rising loan defaults and lack of economic opportunities; the last thing that they need is uncertainly around access to critical markets in Canada and Mexico. America’s heartland is facing a precarious financial situation, they need free trade with our NAFTA partners now more than ever.