NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss said the economy on Rural Mainstreet in the Midwest is slowing, as is the global economy.
"Agricultural exports dropped for the region almost 15% for 2023, compared to the same period in 2022," Goss said. "The global economy is cooling down significantly, that, of course, includes China. We export a lot of goods to China, particularly agricultural goods. It is often said, the U.S. economy is the cleanest shirt in a dirty laundry."
The impact on local and regional banks has been negative, to say the least.
"Deposits continue to move out of the rural banks," Goss said. "The higher interest rates from the Federal Reserve has pushed the rates across the board to rise. The banks are having significant difficulty holding on to those deposits, as investors or depositors seek higher rates of return."
Also, policy that says that large banks will be bailed out, while small banks can only promise depositors FDIC level protection for their assets makes it so people with means will bank in multiple places, if they have the ability.
"These community banks, they've held up pretty well," Goss said. "There's been a few failures, certainly one in Kansas recently. Overall, still, for the banks, it's not as tough as I would have expected."
Goss does expect there to be at least more merger activity in the coming quarters, even if failures are kept to a minimum in community banking.
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