Alternative U.S. Economic Cement Outlook Scenarios: Fall/Winter 2025
- Ed Sullivan
- Dec 9, 2025
- 14 min read
Updated: Jan 7
Economic Forecast
Introduction
All forecasts contain risk. Risks can originate from the data used, the process of calculations, the assumptions, or a combination of each element. Indeed, an infinite number of alternative scenarios to the Baseline exist. Each materializes with even small changes in assumptions.
The risks surrounding The Sullivan Report’s Fall/Winter 2025 Forecast remain high. They center on assessments regarding underlying strength of the economy and the headwinds that face the near-term economy. Key assessments include:
1. The impact of administration policies on the economic fundamentals.
2. Federal Reserve monetary policy actions.
3. The strength and resiliency of consumer spending.
Other risks ranging from global military conflicts to extraordinary weather events are not captured in either our Baseline or Alternative Scenarios.
Data risks are also particularly important in this report. With the federal government shutdown, reporting delays in data have materialized. The latest U.S. Geological Survey (USGS) cement consumption report was June 2025. That is a considerable data lag and creates risk. Finally, my regular talks with people in the field suggest a theme of recent strengthening in order books and activity. If this is accurate on a broad scale, it may suggest upside risk to the economy.
Monetary policy and forecast risks are projected to heighten in 2027. Our Baseline Forecast assumes more aggressive easing in monetary policy will unfold beginning in the second half of 2026, based on President Trump choosing a chair more aligned with his policy preferences. It raises the potential for monetary policy to tilt toward short-term, political objectives rather than long-term, price-stability goals.
If aggressive rate reductions unfold in the context of improving inflation, a strong, residential-led construction rebound is likely to take hold in 2027 - and thereafter (reflected in our Optimistic Scenario below). If instead, the cuts occur amid rising inflation, they risk fueling further price acceleration and could force the Fed into a renewed tightening cycle in 2027 (reflected in our Pessimistic Scenario below).
Significant macroeconomic risk also lies in the outyears of the forecast. Eventually, artificial intelligence (AI) could disrupt hiring practices. While some suggest AI could lead to a significant increase in unemployment, most experts suggest that possibility is years beyond the 2030 forecast horizon.
Want to read more?
Subscribe to thesullivanreport.com to keep reading this exclusive post.
