At midyear, Sioux Falls CEOs hold more optimistic view of business conditions, local economy
July 13, 2026Sioux Falls CEOs are seeing much the same business conditions as a year ago — while feeling more optimistic about what’s ahead in 2026. That’s according to the most recent SiouxFalls. Business. . .
July 13, 2026Sioux Falls CEOs are seeing much the same business conditions as a year ago — while feeling more optimistic about what’s ahead in 2026. That’s according to the most recent SiouxFalls. Business quarterly CEO survey, conducted in partnership with the Augustana Research Institute and the Sioux Falls Development Foundation. The survey was conducted during mid-June and completed by nearly 50 CEOs and business owners. The response rate was on par with three months ago and lower than the survey’s historical response rate of about 70 leaders. “Three months ago, there was a great deal of uncertainty surrounding inflation, energy costs, trade policy and broader geopolitical developments,” said Raymond Leach, director of fintech at Augustana University. “While many of the concerns from Q1 remain, businesses appear to have become somewhat more accustomed to operating in that environment. ”Inflation still remains high and increasing, with core PCE inflation — personal consumption expenditures minus food and energy — from May showing an annual rate of 3. 4 percent, he said. The ongoing conflict with Iran also led to persistently high fuel prices. “All that being said, the broader economy has remained relatively resilient,” Leach said, noting local unemployment at 1. 8 percent and the latest national gross domestic product at the end of the first quarter showing a 2. 1 percent annual increase led by private investment. “Despite the price concerns, other economic indicators are strong,” he said. “These themes show up in our survey results. ”Nineteen percent of CEOs said overall conditions at their business are excellent — exactly the same as a year ago and a 3 percentage point increase from the prior quarter. More than half said conditions were good — also the same as last year and an improvement from the prior quarter. Sales activity showed at least some increase for 62 percent of respondents while remaining flat for 14 percent and showing a slight decrease for 24 percent. That’s also an improvement over the prior quarter. There was a noticeable change in prices charged for products and services, with 59 percent reporting at least a slight increase versus 35 percent in the prior quarter. “Prices saw a clear, if moderate, turn higher, especially quarter over quarter, which is the more important comparison here,” said Ron Wirtz, regional outreach director for the Minneapolis Federal Reserve. “Prices for most — but not all — things tend not to be seasonal, while sales (and) revenue can see larger seasonal effects. ”The share of businesses reporting a price increase nearly doubled, while the share reporting significant increases quadrupled, he added. “That fact that Sioux Falls businesses saw price increases is not a big surprise; our Minneapolis Fed surveys are showing much the same signal from businesses across a six-state region,” Wirtz said. “The question is whether that’s a blip or a longer-term trend, and is something we’re obviously watching very closely. ”CEOs reported an increase in hiring in the second quarter as well, with 39 percent reporting at least a slight increase versus 14 percent three months ago. “Taken together, the results suggest that many firms continue to see opportunities for growth despite an environment that remains somewhat uncertain,” Leach said. CEOs also showed somewhat improving perceptions of the Sioux Falls and U. S. business climate. Two-thirds said the overall business climate in Sioux Falls was good or excellent, up from 60 percent three months ago. While perceptions of the national economy were worse, they still showed improvement, with 17 percent rating it poor versus 31 percent three months ago. Looking ahead, nearly three in 10 CEOs expect above-average business activity in the third quarter, an increase from three months ago. More than 25 percent expect above-average capital expenditures, also up from the first quarter. And hiring took a big jump, with nearly one in four CEOs anticipating above-average hiring in the third quarter, versus just 4 percent three months ago. “The forward-looking responses are among the most encouraging aspects of this quarter’s survey,” Leach said, noting that expectations for sales activity and hiring are the strongest since early 2025. “Those findings align well with what we’re seeing in other local indicators, including employment and local sales tax growth, which continue to show underlying economic strength. Over the past year and a half, confidence appears to have strengthened noticeably. ”Overall, “some of the ‘worrying’ sentiment that seeped through in the first quarter from Sioux Falls businesses seems to have dissipated,” Wirtz added. “Expectations for the coming quarter for business activity improved moderately, particularly in the share with a pessimistic outlook. That’s a good signal. ”Bob Mundt, president and CEO of the Sioux Falls Development Foundation, said: “I am pleased with expectations — with investment, business activity, expenditures and hiring all showing an upward trend, signaling a higher confidence level in future activity. I believe our business community remains cautiously optimistic about the year ahead. ”One element that stands out in the survey “is the contrast between ongoing uncertainty and continued optimism,” Leach added. “Businesses still face higher costs and an uncertain economic environment, yet many CEOs continue to expect growth in sales, hiring and investment. That combination speaks to the resilience of the Sioux Falls business community. While it’s important to watch how inflation, interest rates and broader economic conditions evolve over the remainder of the year, this quarter’s survey suggests that local business leaders remain confident in their ability to navigate those challenges. ”Sioux Falls Development Foundation resourcesDo you have further information to share about conditions at your business? Or are you looking to connect to additional resources to support your growth? The Sioux Falls Development Foundation can assist you in the following areas:Workforce development:The Development Foundation offers programs and initiatives to help you attract, retain and develop your workforce. Contact Denise Guzzetta, vice president of talent and workforce development, at 605-274-0475 ordeniseg@siouxfalls. com. Business growth and expansion:Whether your business is planning an expansion in the next five years or facing risk factors impacting growth, the Development Foundation can help by discussing existing building space, available land, potential local and state incentives and other resources. Contact Mike Gray, director of business expansion and retention, at 605-274-0471 ormikeg@siouxfalls. com.