For the inaugural post of the year I thought to take a step back and look forward. There are so many issues that could be confronted by Grand Forks, North Dakota, and the US in the coming year that I think it is important to highlight a few that keep my attention right now. Let’s start locally.
There are many things Grand Forks needs to confront right now. There is a curious demographic/labor dynamic occurring right now that threatens to impact businesses on both the selling front and the producing front. One need only look at the relative lack of progress on measures like labor force to see that Grand Forks, at a time when the state as a whole was doing amazingly well, advanced at a slower pace than other communities.
The retail landscape is also in flux. I field frequent questions about exchange rates and the impact on sales. Of larger concern right now should be the composition of the retail sector. If the exchange rate moves in favor of Canada, which seems likely for at least a time, do you have any stores at which they want to shop? This is a question Fargo should be asking too. The shopping available in the Twin Cities area can be a significant detractor for local retail if not properly positioned.
North Dakota is going to see a mix of positive and negative, like most other states. I think global volatility in petroleum will be of benefit to the state economy, especially with higher oil prices. The overall direction of trade, and in particular trade policy, leave the performance of the agriculture sector an open question. There is actually a regional division in the impacts of agriculture as well.
Of further concern to me is the demographic impact on the state population from oil in particular. Oil activity brought in a different demographic composition and has the potential to create significant long term changes in the state population. While I would tend to view this as an overall positive there are added issues from this change. There would be changes in demand for medical services, seats in schools, and so on.
Volatility in economic policy and performance will continue to be the norm. I doubt seriously that the election changes that. It appears trade will continue to be an issue. I think we will see more publicly owned banks in different states and I question what that does for the stability of the financial system. The fiscal situation is a problem and will continue to be a problem for the United States, though I might be one of the few that maintains this is a problem.
Broader economic circumstances will keep demographic changes muted. It seems unlikely there will be large increases in births. You do not really need to disincentivize death. However, social strains and economic issues will also present an issue for international migration.
There will be more predictions but I had to start somewhere with these outlooks and so here we go.