Highway Spending Faces Another Year of Decline
- Ed Sullivan
- Nov 11, 2025
- 7 min read
Updated: Nov 15, 2025
Market Update
The U.S. construction, cement and concrete markets are poised for another year of contraction. Even in the wake of recent interest rate cuts by the Federal Reserve, lending rates for commercial and home buyers remain high. With the private-sector subdued, any potential for growth this year will hinge on sectors less sensitive to interest rates.
While onshoring and data center construction have emerged as bright spots within the U.S. cement market, their overall impact remains limited in a 100 million-metric-ton cement industry. The burden of near-term growth now falls on public construction - particularly highways.
Unfortunately, real highway spending has already entered its second consecutive year of decline, with another modest one expected next year. Coupled with a subdued recovery across residential and nonresidential markets, it suggests another challenging year lies ahead for those in the cement and concrete industries.
This article lays out the reasoning behind this conclusion and what that means for the 2026 outlook. Keep in mind, the conclusions presented here reflect national trends. Regional trends could be much different depending on unique market conditions and the state level.
Public Construction
There is no shortage of demand for public infrastructure. As the population and economy grow, more demands are placed on public infrastructure. Infrastructure is critical in providing the efficient flow of commerce as well as providing public health, safety, and education to our populace. Yet history shows that infrastructure investment often fails to keep pace – leading to infrastructure deterioration, deferred maintenance, and reduced public benefit.
The American Society of Civil Engineers (ASCE) periodically provides a “Report Card” on the state of the nation’s infrastructure, and it shows there is a clear need for increased investment in our infrastructure. ASCE estimated it would require $9.1 trillion in real (2022) dollar spending to bring the nation’s infrastructure into a “state of good repair“ by 2033.
Want to read more?
Subscribe to thesullivanreport.com to keep reading this exclusive post.
