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South Dakota economy outpaces region; Outlook unclear going into 2024

Indicators tell the story of a reasonably strong economy for the state of South Dakota, but experts say businesses still face many uncertainties in the new year.

Economists reported a drop in inflation over November, but that’s only one factor businesses nationwide contend with.

Creighton University economist Ernie Goss publishes the monthly Mid-America Manufacturing Index. He said South Dakota outpaced the region.

“2023 was certainly a good year for South Dakota," Goss said. "Now, for the region, not as much so. Manufacturing was a bit weaker in the region, a little less so for South Dakota where numbers looked a little better – we saw job growth and wage growth. Overall things are moving sideways to a bit up, and certainly for South Dakota things looked even better.”

Goss said it’s reflected in the data.

“The wage growth for South Dakota manufacturers was significantly above inflation," Goss said. "In fact, about three times above inflation, so that was good for the South Dakota manufacturing sector.”

Issues a world away have a direct connection to the midwestern economy though. Goss said federal spending and global trends are important to watch going into 2024.

“For South Dakota, and for that matter the region, we’re talking about an economy that has a lot to do with agriculture – and agriculture is international," Goss said. "The ups and downs in the global economy are telegraphed right back to South Dakota, right back to the region, and we’re seeing luckily the farm income is looking pretty good.”

Forty-six percent of survey respondents named the potential for recession as a top worry heading into 2024.

C.J. Keene is a Rapid City-based journalist covering the legal system, education, and culture