Creighton Survey: Rural Economy Across Region Including South Dakota Slips as Manufacturing Expands

Northeast Radio SD News – Watertown, SD - While regional manufacturing across nine Mid-America states expanded for an eighth consecutive month, the agricultural and rural banking economy across the 10-state Rural Mainstreet region slipped below growth neutral for the fourth time in the past six months, according to the October 2026 Economic Trends report released Wednesday, Oct. 28, 2026, by Creighton University economist Dr. Ernie Goss.

The Creighton Institute for Economic Inquiry’s monthly report compiles September survey results from supply managers and procurement experts in nine Mid-America states, along with a survey of rural bank CEOs across the 10-state Rural Mainstreet region, including South Dakota.

Rural Mainstreet Index: Tariffs, Fertilizer Costs and 37-Month Slump in Farm Equipment Sales

According to Creighton’s monthly survey of rural bank CEOs, the overall Rural Mainstreet Index (RMI) moved below growth neutral in September as higher fuel and fertilizer costs offset optimism from higher grain prices. Farm and ranch land prices continued to move sideways to slightly higher, while agricultural equipment sales remained weak.

Key highlights from the September 2026 Rural Mainstreet survey include:

·         Tariff Impacts on Agriculture: Approximately 79.0% of rural bankers reported that tariffs are having a negative impact on the agriculture and livestock economy.

·         Farm Equipment Sales: The farm equipment sales index fell below growth neutral for the 37th consecutive month.

·         Agricultural and Livestock Exports: According to International Trade Association (ITA) data cited in the report, regional exports of agricultural goods and livestock reached $6.629 billion during the first seven months of 2026, up 7.2% from $6.182 billion during the same period in 2025. However, 2026 regional agricultural and livestock exports remained 4.4% below the same seven-month period in 2024, driven primarily by a 59.9% drop in exports to China between 2024 and 2026.

Mid-America Manufacturing: Eight Straight Months of Expansion Amid Supply Chain and Tariff Pressures

In contrast to the rural banking pullback, Creighton’s survey of supply managers across the nine-state Mid-America region showed the overall Mid-America Business Conditions Index remaining above growth neutral for an eighth straight month.

Key findings from the September 2026 Mid-America manufacturing survey include:

·         Regional Manufacturing Jobs: The regional employment index rose above growth neutral for only the fourth time in the past 12 months, though job growth continues to trail overall economic expansion. Nationally, manufacturing added 9,000 jobs in September and is up 72,000 jobs since hitting a low in December 2025.

·         Tariffs and Profit Margins: Supply managers reported that an average of 28.5% of tariffs were passed along to buyers, while approximately 41.7% of supply managers reported that tariffs were negatively impacting profits.

·         Middle East Supply Chain Disruptions: Approximately 58% of regional supply managers reported that the conflict in Iran has made supply chains less reliable.

·         Wholesale Inflation: Elevated inflation at the wholesale level points to at least one additional Federal Reserve interest rate increase before the end of 2026.

National Outlook: Inflation, Interest Rates and the $1.993 Trillion Federal Deficit

Goss also highlighted national macroeconomic data and the October 2026 National Association for Business Economics (NABE) Outlook Survey, which projects 2.1%

inflation-adjusted U.S. gross domestic product (GDP) growth for 2026, supported by a 6.7% increase in business investment.

Following the Federal Open Market Committee’s (FOMC) September rate hike, NABE survey panelists anticipate one more 25-basis-point interest rate increase before the end of 2026—bringing the federal funds target midpoint to 4.125%—with no rate cuts projected through 2027. For the FOMC’s Oct. 27–28 meeting, however, Goss said he expected the Federal Reserve to hold rates steady because of the upcoming midterm elections and mixed economic signals.

While third-quarter 2026 U.S. GDP growth is forecast at 2.6% by the New York Fed’s Nowcast and 3.5% by the Atlanta Fed, Goss pointed to several headwinds facing American households and borrowers:

·         Consumer Prices vs. Wages: The Consumer Price Index (CPI) rose 0.6% in September and stood 3.7% higher than 12 months earlier, with electricity prices up 4.4% year-over-year. Over the same 12-month period, average hourly wages rose 3.0%, trailing inflation.

·         Labor Market: Total nonfarm payroll employment rose by 29,000 in September, while the U.S. unemployment rate ticked up from 4.1% to 4.2%.

·         Federal Debt and Deficit: The U.S. federal budget deficit for fiscal year 2026, which ended Sept. 30, totaled $1.993 trillion, with federal spending at $7.4 trillion and revenue at $5.4 trillion. Citing the U.S. Congress Joint Economic Committee, Goss noted that the U.S. national debt increased by an average of $75,863 per second—or $6.55 billion per day—over the past year.

·         Trade Deficit and Treasury Yields: The U.S. trade deficit widened to $105.6 billion in August 2026 on record imports of $420.8 billion, while the yield on the 10-year U.S. Treasury bond hovered near 5.0% amid deficit spending and inflation expectations.

"Much like a lender's measure of the economic integrity of a borrower, the assessment of the U.S. economy depends on many factors including wages, wage growth, spending, spending growth, debt, growth of debt, inflation, and debt," Goss wrote. "... Ultimately, the distance between economic paradise and purgatory cannot be measured by GDP alone.”