March Data Weakens...But the Outlook Hinges on One Factor: Strait of Hormuz
- Ed Sullivan
- 2 days ago
- 1 min read
Market Update
Recent economic data reflected a modest economic weakening of conditions in the context of elevated inflation. Consumer spending increased – but at a rate less than expected. As a result, inventories rose – sending a signal that future production may come in light. GDP for the fourth quarter was revised down from 0.7% to 0.5%. Finally, consumer sentiment hit record lows.
All this remains within the boundaries of our pre-Iran conflict scenario that expected a first half economic softening, followed by a stronger second half of 2026. The key determinant, the economic outlook, does not lie in the typically reported monthly economic data. It comes down to one factor – how long shipping traffic through the Strait of Hormuz is hindered.
The longer it takes, the more the adverse consequences to the economy. Oil prices will run higher, supply-chains will be stressed, and higher inflation will follow. Higher inflation will be imbedded in interest rates – to the detriment of construction activity.
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The Sullivan Report delivers subscription-based economic forecasts and market intelligence for the cement, concrete, construction, and building materials industries. Led by award-winning economist Ed Sullivan, its flagship U.S. Cement & Construction Outlook provides five-year forecasts and expert analysis to support strategic decision-making. Learn more at TheSullivanReport.com or contact info@thesullivanreport.com.
