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January 1, 2023
The closing weeks of 2022 provided an ongoing pattern for how I view the next weeks of 2023.
But first, a quick look at how I fared in predicting the major themes of the year. In this column I listed what I thought would lead the coming year, and they more or less unfolded accordingly, although I had my fair share of misses.
For example, he predicted that the epidemic would become chronic, which it did.
I thought we’d see more construction on the Sanford USDA Medical Center campus, but I’ve completely missed the impact of various economic conditions on health care this year — and the work stoppages and delays that have resulted in some projects and initiatives.
I thought it would continue to draw more business in it, including the ones we haven’t been able to announce yet.
I said correctly, despite the six-month hiatus, Amazon will not only start operations, but we will also see additional warehouse space to support the growing logistics industry.
I also thought it would be a strong year for retail — which I think, even if there are more bumps in the road than I expected, consumers will get sticker shock from the weather-related effects of the holiday season.
And finally, he predicted that we would easily reach $1 billion in construction activity, which we did – just from new commercial construction. We ended 2022 with nearly $2 billion in total activity. But some projects that I think can go ahead still haven’t been shoveled in the ground.
For example, as we first reported two years ago, CJ Foods was planning to build an Asian food manufacturing facility in northwest Sioux Falls. At the time, it was valued at nearly $500 million and was slated to bring 600 jobs to the city by 2025.
I also didn’t think it would face an election challenge at Wholesale Stone Foods, and now I’m not sure when we’ll even see that project.
The front road feels like ice, as have most of the physical roads around our community in recent weeks.
However, like road conditions, economic conditions are not easy to predict or navigate.
Obviously, I borrowed the analogy from Bob Mundt, president and CEO of the Sioux Falls Development Foundation.
The combination of high borrowing, construction and labor costs makes the numbers hard to pin down, whether for existing business expansions or hundreds of millions in new business projects.
“Our projects have been on a good track, with some hitting the brakes a little bit or making decisions based on a lot of factors,” Mundt said. “I think traffic is still moving, but it’s moving on icy roads. It’s too slow.”
They are also felt in the public sector.
“With the current rate of inflation, it’s sometimes more challenging to try to control this growth than we’re dealing with,” Mayor Paul Tenhaken told me recently. “Trying to do projects is not just new projects, but plowing tires on buses and streets when adding 40 percent salt. It is very expensive to provide our service.
City revenue is generated mostly by sales tax, and will be something to look forward to in the early months of 2023. Income from December sales, i.e. the holidays, often doesn’t show up until the February sales tax report. And while I feel the first few weeks of holiday shopping have been strong for retailers, I’m concerned about how much the several cold and snowy days near Christmas have impacted them. I’m sure, though I don’t think the trend of first-quarter retail and restaurant closings will continue.
But, to continue the analogy, just because roads are icy doesn’t mean we don’t drive on them to get to where we’re going. I think businesses will continue to invest in people and projects this year, in a cautious manner that we haven’t seen in recent years.
While driving is supposed to be tough, you generally win by making sure your vehicle is in good shape and staying within the tracks created to help pave the way. This may be the year to build stronger relationships with existing customers rather than targeting more new people. Or focus on professional development for your current employees and grow your staff. Or upgrading your home or workplace instead of moving to a new one.
Difficult economic conditions always produce winners.
I didn’t grow up in this part of the country, so my first memory of what certain seasons can do is reading Laura Ingalls Wilder’s “The Long Winter.”
“He can’t defeat us!” Pa tells Laura in the story that he has reported back to back snowstorms between October and April.
“It has to stop once and we won’t. He cannot lick us. “We will not give up,” he said.
It’s still a good reminder almost two and a half centuries later.
Jodi’s Journal: From a small room in a shelter, the workforce is a win-win
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