January 1, 2023
The closing weeks of 2022 provided an ongoing metaphor for how I view the coming weeks of 2023.
But first, a quick look back at how I did predicting the top topics of the year that was. In this column, I detailed what I thought the coming year would bring, and it more or less unfolded accordingly, though I had my share of misses too.
For example, I predicted that the pandemic would give way to endemic status, which it did.
I thought we’d see more construction activity on the Sanford USD Medical Center campus, which we are, but I also missed the full effect that various economic factors had on health care this year—and the layoffs and layoffs that resulted in some projects and initiatives.
I thought downtown would continue to attract more business activity, which it has, including some we haven’t been able to announce yet.
I called it right, albeit about six months off, that not only would Amazon begin operations, but we would also see an increase in additional warehouse space to support the growing logistics industry.
I also thought it was going to be a strong year for retail — which I think it was, even if it was interrupted by more bumps in the road than I expected, from consumers getting stickered to weather-related impacts. during the holiday season.
And finally, I predicted that we would easily reach $1 billion in construction activity, which we did – just in new commercial construction. We ended 2022 with about $2 billion in total activity. But some of the projects I thought could be finished so far have yet to put a shovel in the ground.
For example, we first reported nearly two years ago that CJ Foods planned 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 anticipate the voting challenge for Wholestone Foods, and now I’m not sure when we’ll see this project step up.
The road ahead, like the physical roads around much of our community in recent weeks, feels icy.
It seems that, like road conditions, economic conditions are not predictable or easy to navigate.
Transparently, I borrowed the analogy from Bob Mundt, president and CEO of the Sioux Falls Development Foundation.
The combination of higher borrowing, construction and labor costs makes it harder to put numbers on projects of all sizes, whether it’s an expansion for an existing business or one in the hundreds of millions for a new business.
“Our projects have pretty much stayed on track, some of them are knocking around a bit or making decisions based on a number of factors,” Mundt said. “I think it’s kind of like the traffic is still moving, but it’s moving on icy roads. It’s too slow.”
They also feel it in the public sector.
“Trying to manage this growth is much more challenging than we ever let on because of the inflationary environment right now,” Mayor Paul TenHaken told me recently. “Trying to complete projects, and not just new projects, but keeping the wheels on the bus and the roads plowed when the salt has gone up 40 percent. It is much more expensive to provide our services.”
The city’s revenue is largely powered by sales taxes, and that will be something to watch in the first few months of 2023. December’s sales revenue, known as the holiday, often doesn’t show up until the sales tax report of February. And while I feel like the first few weeks of holiday shopping were steady for retailers, I’m concerned about how those many cold and snowy days near Christmas affected. I’m sure we’ll see the tradition of retail and restaurant closings continue in the first quarter, though I don’t think it will be widespread.
But to continue the analogy, just because the roads are icy doesn’t mean we don’t drive on them to get where we need to go. I think businesses this year will continue to invest in people and projects, just with a little caution that we haven’t seen in recent years.
When the driving is expected to be difficult, you generally win by making sure your vehicle is performing optimally and staying on the tracks already created to help clear the way. This could be a year for building stronger relationships with existing customers rather than targeting too many new ones. Or focusing on professional development for your current employees versus growing your staff. Or upgrade your home or workplace instead of moving to a new one.
Challenging economic conditions always produce winners.
I didn’t grow up in this part of the country, so my earliest memory of what certain seasons can do came from reading The Long Winter by Laura Ingalls Wilder.
“He can’t beat us!” Pa tells Laura in the story that shows the back-to-back storms from October to April.
“We have to give up sometime and we don’t. It can’t lick us. We will not give up.”
It’s a good reminder even nearly two and a half centuries later.
Jodi’s Journal: From a small room to a shelter, the workforce wins
