The American Cement Association recently lowered the national cement consumption forecast to shrink by 2.5% in 2026. The core trigger is not the natural adjustment of the domestic construction cycle, but the chain impact of the US-Iraq conflict that broke out in February to the real economy through the financial market. Brian Schmidt, the association's senior director of economic policy and analysis, characterized the geopolitical event as a typical "black swan" and made it clear that the longer the hostilities in the Middle East continue, the more bleak the outlook for U.S. cement demand will be. The transmission mechanism behind
this judgment is clearly visible. The conflict between the United States and Iraq triggered severe turbulence in the bond market, which directly pushed up the cost of borrowing for the whole society. Current mortgage rates have roughly recovered to the level before the Fed started its interest rate cut cycle in September last year, which means that the financing environment created by previous monetary policy easing for private construction activity has been partially offset. For residential construction and private commercial projects that are highly dependent on credit support, the renewed rise in financing costs constitutes a substantial demand suppression, so the association expects the private construction sector to experience another weak year in 2026.
Despite the downgrading of short-term forecasts, the American Cement Association's overall assessment of the year-round cement consumption trajectory has not been fundamentally reversed, suggesting that there is still some structural resilience within the industry, which can maintain the basic market under the dual pressures of geopolitical shocks and tightening monetary environment. More importantly, while revising its outlook for 2026, the association retains its expectation of a return to growth in 2027, indicating that the current 2.5% decline is seen as a periodic disturbance rather than a long-term trend recession. However, the extent to which this recovery prospect is realized will ultimately depend on the path of the Middle East and its continuing impact on global energy markets, inflation expectations and the Fed's policy stance.
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