Construction-materials economist Ed Sullivan is taking aim at retail construction, noting that it does not get much attention, but it is critical to a recovery in private, nonresidential cement and concrete consumption.
It accounts for 65% of total nonresidential cement and concrete consumption and 12% of total cement consumption. Among the key consuming sectors, it ranks only behind highways and streets and single-family homes as the leading cement and concrete consumer.
The sector has been in decline for some time. Of the total 5.3% decline in total cement and concrete consumption in 2024, the retail sector’s decline accounted for nearly a quarter of the decline. It is hard to visualize a recovery in nonresidential cement consumption without a recovery in this important sector.
His new report assesses the outlook for retail construction and its role in determining the depths of 2025’s decline in cement and concrete construction, as well as the timing and strength of recovery that may materialize in 2026 and beyond.
Retail construction in the United States has been on a general decline since the mid-2000s. This trend reflects both structural and cyclical factors. The growth of online shopping has prompted varied responses by retailers. Each response has contributed to a structural decline in retail construction.
More recently, high interest rates, rising construction costs, and growing business uncertainty have contributed to an adverse business environment. Together, these factors have resulted in a real dollar decline in retail construction of 10.8% in 2024.
Through May 2025, retail construction is off another 7.1%. There is no indication that the recent trends will reverse soon, particularly in a slowing economy. If these trends stay in place, they represent a powerful factor weighing against a near-term construction recovery.
Dig deeper into The Sullivan Report forecasts at thesullivanreport.com.
