In a famous rant about fishermen, Vincent van Gogh once said that they know the sea is dangerous and the storm fearsome, but they never let that keep them ashore.
“When night falls, what’s worse: the danger or the fear of danger? Give me reality, the danger itself.” (Did van Gogh know this is exactly why we love factoring?)
Looking back on 2025, we could say it was a year full of promises that went undelivered. We could wallow in frustration, anger, and blame games, but the higher calling is to keep marching on.
With the grit and determination of heroes we admire, we arm ourselves with reality checks and a healthy dose of optimism.
Here, we meander through a recap of what the last year brought to the economy and major sectors and muse on what 2026 could have in store.
Memes
The Manufacturing Mirage
2025 was supposed to be the year we rebuilt the factory floor. Instead, the ISM manufacturing PMI spent most of the year under 50 (contraction territory).
Industrial production barely moved and durable goods orders rolled over. We finished the fall with declines of about 2.2%. Employment in the sector softened, facility investments slowed, and most industry outlooks labeled 2025 as “challenging.”
The bright spots? Chips, high-tech manufacturing, and electronics soaked up incentives and grabbed headlines. Data centers rose where factories once would have. Productivity improved on paper and late-year surveys hinted at optimism for 2026.
The broader picture: manufacturing’s share of GDP kept drifting near 9–10%. Tariffs raised costs instead of confidence. Demand softened as costs climbed. The renaissance we anticipated turned out to be a press conference circuit layered on top of a sector stuck in contraction.
Did U.S. manufacturing grow in 2025? Not really, but it did remind us that slogans alone don’t build factories.
Calm Before the Freight Storm
In 2025, U.S. transportation split into two stories.
Passenger movement kept healing with air travel up around 2%, transit up about 4%, and traffic volumes rising. Infrastructure money from earlier legislation rebuilt 200,000+ miles of roads and bridges and poured into ports, rail, and airports.
On the freight side, trucking stayed locked in a downcycle that began in 2023. Long-haul volumes tied to autos, housing, energy, and manufacturing are down as much as 17% year over year.
Freight guru Craig Fuller calls 2026 “the calm before the storm.” He expects soft volumes to continue but believes the real story is a historic capacity purge. Fuller sees the potential removal of 600,000+ drivers through tighter enforcement and compliance rules with little relief from new immigrant labor.
As supply shrinks, rates could spike into COVID-like territory by late 2026–2027. That would reward compliant, well-capitalized carriers and wash out heavily leveraged brokers and marginal fleets. Autonomous trucking is still on the horizon for 2035–2040, but the competitive edge right now is automating the back office, not the driver’s seat.
Constructive Criticism
Construction grew in 2025, but it was far from a boom. Industry revenue moved toward $3.7T and spending topped $2.2T, largely powered by public infrastructure money still flowing from earlier legislation.
Beneath that, new construction starts fell 1.8%. High rates and tariffs coupled with uncertainty thinned the forward pipeline even while backlogs stayed busy.
Single-family housing stayed constrained by affordability and mortgage rates and multifamily held up only in pockets. Wages rose around 4.2%, but labor shortages deepened. Immigration enforcement tightened hiring just as firms were already short hundreds of thousands of skilled workers.
Looking ahead to 2026, the mood is cautiously optimistic. Growth expectations cluster around 2–4%, driven by infrastructure and AI-era data center build-outs. Rate cuts could also deliver a possible lift to housing.
The biggest constraints are labor, financing costs, and materials under tariff pressure. Success this year will go to firms that can specialize, adopt tech, and stay liquid.
Split Screen: The K-Shaped Economy
Headlines told us that GDP grew, unemployment stayed “low,” and markets hit records. But 2025 made one thing impossible to ignore: America didn’t have one economy. It had a K-shaped one, and which branch you lived on determined the year you had.
At the top of the K, we had asset owners, tech workers, and anyone tied to AI capital who watched the S&P soar to new heights.
At the bottom, lower and middle income households saw wages grow by 1–1.4% while higher earners pushed closer to 4%. And the top 10% ended up responsible for nearly half of all consumer spending.
Inflation “cooled” in headlines but stayed sticky where life actually happens: housing, food, childcare, insurance. Confidence fell back toward 2021 levels because it only worked if you were on the right side of the split.
We can’t predict how this year will go, but expect this pattern to continue in 2026.
Time Marches On
We don’t get to pick the world we live in, only how we operate in it. Policy shifts, engineered markets, K-shaped outcomes, rate cuts/hikes…the tape keeps rolling either way.
Our job is both simple and difficult: build the businesses in front of us, take care of the people who rely on us, and own productive assets so we’re not standing on sand when the tide moves.
Aldous Huxley offered two reminders that feel uncomfortably current: facts don’t stop being true just because we ignore them, and the greatest lesson of history may be how rarely we learn from it.
Cycles repeat, leverage overreaches, booms overpromise, and yet opportunity always hides in the gaps where others refuse to look. The goal isn’t to predict every chapter. It’s to stay awake through the story.
Thoreau framed the other half of the equation: the world is a canvas. If we move confidently in the direction of what we’re building, we tend to meet forms of success that don’t announce themselves in advance.
That’s as true for families as it is for founders, and for owners as it is for operators.
Time is going to march on regardless, so we adapt, we act, we own, and we keep going. Eyes open to the facts, bold imaginations intact.
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Until next time,
