South Dakota Executives Reported Rising Input Costs

Local business leaders cited tariffs and interest rates as key drivers behind increasing operational expenses.

Updated on Sept. 29, 2026 in Inflation

Bold flat-color editorial illustration of a shipping container and lumber stack, representing economic cost pressures. — South Dakota executives report that elevated trade tariffs and interest rates are significantly increasing input costs for regional businesses. AI Illustration. Upload story photo >

Live Poll

Do you expect the cost of goods and services in your area to keep rising?

South Dakota executives have reported significant pressure from rising input costs due to elevated tariffs and recent interest rate adjustments. Companies anticipate that these sustained cost increases will eventually lead to higher prices for consumers.

Why it matters

The intersection of trade tariffs and restricted capital access has created a difficult environment for local firms to maintain pricing stability. Businesses are struggling to balance these overhead costs while operating within a tight labor market.

The cost of electrical transformers has surged by more than 400% since 2020. South Dakota currently maintains a 2% unemployment rate, reflecting a historically tight labor market.

The players

Journey Group

This organization is a regional firm currently navigating the impact of rising input costs on construction and development projects.

NorthWestern Energy

This utility provider is currently absorbing high operational costs and is pursuing a merger with Black Hills Energy.

Black Hills Energy

This energy company is involved in merger negotiations with NorthWestern Energy to achieve greater operational scale.

Federal Reserve

This central banking system of the United States sets national monetary policy and interest rates that affect business borrowing costs.

The details

Companies such as Journey Group and NorthWestern Energy are currently absorbing increased expenses related to metal and wood materials affected by trade tariffs. Businesses are also facing stiff competition for capital as they vie against firms constructing large-scale AI infrastructure.

The surge in electrical transformer costs began in 2020.
The Federal Reserve raised the benchmark interest rate in September 2026.
Executives discussed these economic challenges at the Sioux Falls Metro Economic Briefing on September 24, 2026.

Macro View

This story follows a pattern set by the 2026 Federal Reserve interest rate hikes, which constrained capital access for regional firms. Current economic conditions mirror historical periods where high borrowing costs coincided with supply-side inflation to squeeze corporate margins.

The rising costs faced by local utilities and construction firms likely signal upcoming price increases for household electricity and building projects. Consumers should prepare for higher service rates as companies struggle to offset their own supply-side expenses.

The takeaway

Businesses are attempting to mitigate these cost pressures through strategic mergers to achieve necessary economies of scale. Readers should track local utility rate filings, as these often serve as the first indicator of when broader wholesale cost increases will reach residential bills.