By Seth Mendelson, Editorial Director, Business Facilities
Will the geopolitical situation in Ukraine have an impact on economic development in the U.S.?
The answer, of course, is only if we let it.
Adding to an already-difficult world situation — caused in large part by the COVID-19 pandemic, which in turn brought higher inflation and supply chain issues, which has helped stock markets around the globe to struggle — the war in Ukraine is certain to make a bad situation worse.
But, many experts, including officials in the economic development world, have been quick to note that the demand for new factories and other work locations has never been higher and the competition between regions, states and even cities never more intense.
So now what? The answer appears to be to stay the course and hope that the geopolitical situation works itself out — hopefully with a fast and peaceful solution between the various parties. And, many add, that some of the other issues are starting to improve, especially the steady drop in COVID-19 cases across the country that should allow most of the nation to shortly return to a somewhat normal routine, one not seen in nearly two years.
Still, there are things to watch out for. Energy prices are at levels not seen in about eight years and threaten to go much higher due to Russia’s decision to invade Ukraine last week. Commodity prices, on everything from wheat to soybeans, lumber and industrial metals, are also soaring, helped by that conflict as well as strong spending by consumers in many parts of the world.
What is definite is that the next two to three months — perhaps into the late spring or early summer — will be among the most economically challenging in the last four decades. Economic development has never been a short-term play. That means that building for the future is really the only correct path, especially during tough times.