Sioux Falls economy perking up after sluggish start to 2023
Taxable sales increased in April and residential construction showing signs of improvement, though not on the scale of 2022.
SIOUX FALLS — There were good signs of growth in the Sioux Falls economy in April after some sluggishness to start the year.
The number of permits for new homes issued this year more than doubled to 77, still far lower than the massive building numbers from 2022 but a better showing than the first quarter of the year.
Sales tax revenue was up 7.6%, the best number so far this year, according to data released by the city finance department on Monday, May 15.
The latest data shows that the local economy remains stable amid lingering fears of recession nationally. Interest rate hikes to fight stubborn inflation chilled the housing market in late 2022.
Just 33 single family home permits were issued through March in Sioux Falls. That jumped to 77 by the end of April. It’s not a huge number in comparison to last year’s record building boom but it’s encouraging, said Shawn Pritchett, city finance director.
“It was positive to see more robust sales tax returns for April showing the current resiliency of the Sioux Falls economy thus far,” he said. “Improved single-family permitting was also positive to see although we still track behind the activity we saw in the area a few years ago.”
The sector-by-sector taxable sales numbers for March were also released Monday.
The data showed steady growth across the sectors with manufacturing topping the list at 13% increase compared to March of 2022.
The notable exception was home furniture, furnishing and equipment stores with a 15% drop from last year.
Lumber, Hardware, and Garden Supplies also fell 5%, likely a reflection of the overall slowdown in building.
Overall building activity is strong.
The total value of permits issued so far this year is $377.5 million. That's well behind the record pace of last year, which was $542.5 million in the first four months. But it’s well ahead of 2021 at $318.5 million.
The finance department will present the data to the city council at its informational meeting Tuesday, May 16.
Other highlights from the monthly report include:
- The unemployment rate in March dropped to 1.7% in the metropolitan area, from 2.3% in February.
- More than 1,500 jobs were added in March to a total of 160,889.
- The rolling 12-month average growth in sales tax revenue continued to slide. That number dropped from 9.3% in March to 9% in April as the booming months of last spring are not included.
- The entertainment tax – the 1% charged on prepared food and drink – was a steady 9.7% in April, losing just one-tenth of a percentage point to March.