January 1, 2023
The closing weeks of 2022 have provided a continuing metaphor for how I see the next few weeks of 2023.
But first, let’s take a quick look at how we succeeded in predicting the year’s top themes. In this column, I’ve detailed what I think will drive the year ahead. It more or less unfolded accordingly, but I had some missteps as well.
For example, I predicted that pandemics would give way to endemic conditions.
While we expected to see more construction activity on the Sanford USD Medical Center campus, we completely missed the impact of various economic factors on healthcare this year. .
I thought Downtown would continue to draw more business activity, including some that have yet to be announced.
Not only will Amazon begin operations, but we will also see a surge in additional warehouse space to support the growing logistics industry.
We also thought this year would be a good year for retail. From consumers starting to get sticker shocks during the holiday season to weather-related effects, we think there were more bumps than expected along the way.
And finally, I predicted that we would easily reach $1 billion in construction activity. This has happened in new commercial construction alone. By the end of 2022, our overall activity will be close to $2 billion. But some of the projects I thought might be on the horizon have yet to put a shovel in the ground.
For example, CJ Foods first reported plans to build an Asian food production facility in northwest Sioux Falls just over two years ago. At the time, it was estimated at about $500 million and was set to bring 600 jobs to the town by 2025.
I also didn’t expect the vote challenge against Wholestone Foods. Also, I don’t know when the project will break ground.
The road ahead feels icy, much like the physical roads around much of our community in recent weeks.
Much like road conditions, economic conditions can seem unpredictable or difficult to navigate.
Transparency borrowed an analogy from Bob Mund, president and CEO of the Sioux Falls Development Foundation.
Soaring borrowing, construction and labor costs combine to make it difficult to draw numbers for projects of any size, whether they’re expansions of existing businesses or hundreds of millions of new ones.
“Our projects are mostly on track. Some of them are hitting the brakes a little bit or making decisions based on many factors,” Mundt said. “I think it’s kind of like the traffic is still moving, but it’s on an icy road. It’s very slow.”
They feel it in the public sector too.
“Trying to manage this growth is a lot harder than we sometimes let on because of the current inflation environment,” Mayor Paul Tenhaken recently told me. We are about to complete the project by keeping the wheels of the bus up and plowing the roads when the salinity rises by 40%, it will cost much more to provide our services. ”
The city’s revenue is primarily supported by the sales tax, which will be something to watch in early 2023. December sales, or holiday sales, are often not reflected until the February sales tax report. The first few weeks of the holiday season have felt solid for retailers, but there are concerns about how the cold, snowy days close to Christmas have affected retailers. doing. While we believe the tradition of retail and restaurant closures in the first quarter will continue, we do not expect it to be widespread.
But to continue the analogy, just because the roads are icy doesn’t mean you shouldn’t drive on them to get to your destination. I think companies will continue to invest in people and projects this year, but with a slight caution that hasn’t been seen in years.
When tough driving is expected, you usually win by making sure your vehicle is running in optimal condition and staying on the track that has already been created to clear the way. This year may be a year of strengthening relationships with existing customers rather than targeting many new customers. Alternatively, focus on professional development of current employees rather than increasing staff. Or improve your home or office instead of moving to a new home or office.
Difficult economic times always produce winners as well.
I didn’t grow up in this part of the country, so the first time I was reminded of what certain seasons bring was when I read Laura Ingalls Wilder’s The Long Winter.
“We can’t win!” Pa tells Laura in a story that chronicles a series of blizzards from October through April.
“Someday we’ll have to quit, but we won’t quit. It can’t lick us. We won’t give up.”
Almost two and a half centuries later, it’s still a good memory.
Jody’s Journal: A win-win for labor from a small room in the shelter