Jan. 1, 2023

The closing weeks of 2022 provided a continual metaphor for how I view the coming weeks of 2023.

But first, a quick look back at how I fared predicting the top themes of the year that was. In this column, I detailed what I thought would drive the year ahead, and it more or less unfolded accordingly, though I had my share of misses too.

For example, I predicted the pandemic would give way to endemic status, which it did.

I thought we’d see more building activity on the campus of Sanford USD Medical Center, which we are, but I also missed the full effect various economic factors had on health care this year — and the resulting layoffs and pullback on some projects and initiatives.

I thought downtown would continue to draw more business activity, which it has, including some we’ve not been able to announce yet.

I called it right, albeit about six months off, that not only would Amazon begin operations but we’d also see a surge of additional warehouse space to support the growing logistics industry.

I also thought it would be a strong year for retail — which I think it was, though punctuated by more bumps than I anticipated along the way, from consumers beginning to get sticker shock to weather-related impacts during the holiday season.

And finally, I predicted we’d easily reach $1 billion in building activity, which we did — in new commercial construction alone. We ended 2022 at nearly $2 billion in overall activity. But some of the projects I thought might be going by now still have not put a shovel in the ground.

For instance, we first reported nearly two years ago that CJ Foods planned to build an Asian food production facility in northwest Sioux Falls. At the time, it was estimated at nearly $500 million and slated to bring 600 jobs to town by 2025.

I also did not anticipate the ballot challenge to Wholestone Foods, and now I’m not sure when we’ll see that project break ground either.

The road ahead, much like the physical roads around much of our community in recent weeks, feels icy.

It seems as though, just like the road conditions, the economic conditions aren’t 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 for the numbers to pencil out for 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, a few of them are tapping the brakes a little bit or making decisions based upon a number of factors,” Mundt said. “I think it’s kind of like traffic is still moving, but it’s moving on icy roads. It’s very slow.”

They feel it in the public sector too.

“Trying to manage this growth is much more challenging than we sometimes let on because of the inflationary environment right now,” Mayor Paul TenHaken told me recently. “Trying to get projects done, and not just new projects but keeping the wheels on the bus and the streets plowed when salt is up 40 percent. It’s a lot more expensive to deliver our services.”

City revenue is powered largely by sales tax, and that will be something to watch in the early months of 2023. Revenue from December sales, aka the holidays, often doesn’t show up until the February sales tax report. And while I feel like the early weeks of holiday shopping were solid for retailers, I’m concerned about how multiple cold, snowy days close to Christmas impacted them. I’m sure we will see the tradition of first-quarter retail and restaurant closures continue, though I don’t think it will be widespread.

But, to continue the analogy, just because 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 modicum of caution we haven’t seen in recent years.

When the driving is expected to be tough, you generally win by making sure your vehicle is running optimally and staying in the tracks already created to help pave the way. This might be a year for building stronger relationships with existing customers rather than targeting a lot of new ones. Or focusing on professional development for your current employees versus growing your staff. Or improving your home or workplace rather than moving into a new one.

Challenging economic conditions always produce winners too.

I didn’t grow up in this part of the country, so my earliest recollection of what certain seasons can do came from reading “The Long Winter” by Laura Ingalls Wilder.

“It can’t beat us!” Pa tells Laura in the story that chronicles back-to-back blizzards from October through April.

“It’s got to quit sometime and we don’t. It can’t lick us. We won’t give up.”

It’s a good reminder nearly a century and a half later too.

Jodi’s Journal: From a small room in a shelter, a workforce win-win