The American Cement Association’s (ACA) market intelligence team expects inflation and interest rates to remain elevated throughout 2026.
The prediction is included in ACA’s summer economic forecast. According to ACA, ongoing uncertainty about the Iran War’s timeline is largely to blame for continued inflation and high interest rates.
Higher costs will continue to weigh on construction projects, but they are not expected to cause another negative year in 2027, ACA says. As uncertainty eases next year, the Federal Reserve is likely to make one rate cut, prompted by inflationary data moving in the right direction. Although the cut is not expected to significantly affect the construction season, it should mark the start of a recovery in cement volumes.
ACA forecasts slight growth of 0.4 percent in 2027, led by a nascent rebound in single-family construction. In 2028, a more substantial gain of 2.6 percent is expected as all three construction sectors will contribute to growth.
Data centers, which have grown considerably over the last 12 months, now account for 55 percent of office construction spending. In 2025, data centers made up 40 percent of the subsector’s spending. Because of this growth, ACA has upwardly adjusted its outlook for data center construction, expecting 625,000 to 725,000 metric tons of cement to be used for data center expansion annually between 2026 and 2028.
“Despite high inflation and elevated interest rates, consumer spending and the labor market continue to show resilience,” says Brian Schmidt, senior director of economic policy and analytics at ACA. “What’s in question is whether a fragile economy can stay the course. The stock market has been positive overall for top-earning households this year, but there are many downside risks to consider, such as rising delinquencies and defaults among the lower end of the income spectrum.”
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