Sioux Falls CEO survey: Business conditions hit lowest level in four months

By Jodi Schwan

Sioux Falls CEOs are noticeably less positive about conditions at their businesses and in the city than they were four months ago.

That’s according to the more than 50 area leaders who responded to a survey of market conditions produced by SiouxFalls.Business in partnership with the Augustana Research Institute.

Thirty percent said conditions at their business were excellent, down from 32 percent in July and 37 percent in May.

Fifty-nine percent said conditions were good, down from 63 percent two months ago.

Nine percent said conditions were fair, up from 5 percent  inJuly.

And for the first time, 2 percent said conditions were poor.

“We remain cautiously optimistic,” said Tony Ratchford, who leads Keller Williams Realty Sioux Falls. “It would be good to get some of the negative rhetoric out of the news. People want to feel better about everything.”

His sense is the real estate market is slowing a bit, even though sales are steady.

“I can feel the prices are softer. Homes are taking longer sell; buyers are hesitant. It’s just a feeling from too many years doing this. All in all, it’s good. Perhaps it’s a fall pause.”

Other CEOs’ business expectations were varied according to the survey, with 42 percent saying they expect above-average business activity in the next two months, compared with 39 percent in July and 55 percent in May. Fifty-one percent said they expect average activity, down from 58 percent in July and up from 42 percent in May. Six percent expect below-average activity, which is twice the number from July and May.

“The weakening of business expectations is undoubtedly tied to uncertainty created by the hyperactive Atlantic storm season, the major earthquakes in Mexico, the distant but real threat posed by North Korea and the Trump administration’s continued inability to enact major legislation,” said Robert Wright, Nef Family Chair of Political Economy at Augustana University.

“Such events impact South Dakota businesses but not as fully or directly as they buffet the overall U.S. economy.”

Sioux Falls CEOs also had their lowest opinion yet of the national economy. While almost 70 percent said it was good in May, just over half did in the most recent survey.

In evaluating the Sioux Falls economy, their opinion also declined. In May, 61 percent said it was excellent. That has dropped to 33 percent.

A smaller percentage of respondents also indicated their hiring and capital expenditures would be above average in the next two months, while two in three said the prices for their products and services remained unchanged in the past two months.

“Which is not surprising given the low level of inflation,” Wright said. “To be able to raise prices in the current macroeconomic environment, respondents would have to gain market power, for example through merger or withdrawal of a competitor, or introduce a product or service improvement desired by consumers.”

Sioux Falls CEO survey: Business conditions hit lowest level in four months

Sioux Falls CEOs are noticeably less positive about conditions at their businesses and in the city than they were four months ago.

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