A flat quarter, a few bright spots, and some pressure points for Midwest businesses

For more in depth information regarding this article, download the entire report here.

Every few weeks, the Federal Reserve gathers on-the-ground reports from business owners, lenders, and economists across the country and publishes them in the Beige Book. The October 14 edition from the Federal Reserve Bank of Chicago covers the Seventh District, which includes Iowa and most of Illinois, Indiana, Michigan, and Wisconsin. Here’s what it says and what it may mean for First Community Bank and Trust customers.

A Flat Picture Overall

Economic activity in the District was flat on balance in late August and September, though contacts expected a slight pickup over the coming year. That’s not a downturn, but it is a pause after several months of modest growth.

Where Activity is Holding Up

Manufacturing demand rose modestly and employment edged up slightly. Manufacturers’ main concern was people: they reported difficulty finding skilled workers and trouble keeping the ones they have. If you’re hiring, you’re competing for talent, and retention matters as much as recruiting.

Where It’s Softer

Consumer spending was flat, while construction, real estate activity, and business spending all declined slightly. Owners are being cautious about big capital decisions, and the report suggests many are waiting for more clarity before committing.

Costs And Credit Conditions

Prices rose moderately, wages rose modestly, and benefits costs grew moderately. Financial conditions tightened modestly. That fits the broader rate environment, since the Federal Reserve raised its target range in September. For businesses with variable-rate debt or loans coming up for renewal, now is a good time to review your borrowing costs and plan ahead.

A Tough Harvest for Agriculture

Farm income expectations for 2026 edged down. Heavy rains slowed harvest across much of the District and were expected to lower yields, especially for soybeans, and in some areas crop insurance isn’t expected to cover the lost income. For agricultural operators and the businesses that serve them, this is worth watching closely heading into the winter.

What You Can Do Now

• Stress-test your 2027 budget against moderate cost increases.
• If you’re considering equipment or expansion, start the conversation early so timing and structure fit your plans.

At First Community Bank and Trust, we’re here to help you think through these decisions. Reach out to one of our commercial lenders to talk about how current conditions affect your plans.

For more in depth information regarding this article, download the entire report here.

 

About First Community Bank and Trust
First Community Bank and Trust is a privately-owned bank. Established in 1916 First Community Bank and Trust has been serving Beecher, IL, Peotone, IL and the surrounding communities for over 110 years. Our commitment to providing the best banking products and services is matched only by our outstanding customer service. We offer traditional community banking services, including mortgage, consumer, and commercial lending, as well as state of the art electronic banking services.

Press Contact:
Steve Koehn, Senior Vice President
First Community Bank and Trust
(708) 946-2246

 

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