The Sullivan Report Releases Its Spring 2026: U.S. Cement, Construction & Concrete Outlook

Geopolitical Tensions and Inflation Push Construction Recovery Into 2027

GLENVIEW, IL, UNITED STATES, March 17, 2026 /EINPresswire.com/ -- ‘Prior to recent geopolitical events, the U.S. cement market seemed poised for a modest recovery in 2026. That has all changed with the Iranian conflict,' noted The Sullivan Report’s economist, Ed Sullivan.

'The housing and nonresidential sectors of construction will not show a meaningful recovery until interest rates ease significantly. With the Iranian conflict, Inflation will be higher, and the Federal Reserve will likely be hesitant to cut policy rates,' he said. 'Those factors, coupled with higher lending uncertainty, could delay the construction and cement market recovery until next year.’

The Sullivan Report's newly released Spring 2026: U.S. Cement, Construction & Concrete Outlook outlines trends and issues impacting the construction and cement industries.

According to the report, there are three scenarios on the duration and degree to which shipping is curtailed through the Strait of Hormuz.

The Baseline scenario suggests elevated oil prices remain in place through much of the second quarter. This reflects the cessation of hostilities, unencumbered shipping through the Strait of Hormuz, and allows for time for the supply chain to reset.

Under these conditions, the construction recovery is delayed six months, and a meaningful recovery does not materialize until the first half of 2027. The worst-case scenario suggests higher and more prolonged inflation that stretches out the construction recovery even further into 2027.

‘Higher inflation and interest rates imply another tough year for homebuilder and homebuyers,” said Sullivan. ‘Since the conflict began, mortgage rates have already clicked up nearly 30 basis points. We need something substantially below 6% to unleash the pent-up demand generated over the past several years. But with the Iran conflict, mortgage rates are heading the wrong way to count on a homebuilding recovery’.

He also pointed out the adverse impacts are not focused only on the private construction sector. ‘The public sector relies heavily on programs that fund infrastructure investment based on nominal spending levels that were targeted years ago.’

Breaking it down further, he said, ‘With the administration phasing out one of its strongest infrastructure funding programs - the Infrastructure Investment and Jobs Act – and no replacement yet defined, inflation dilutes the purchasing power and potency of public (federal and state) spending programs. The higher the inflation, the less real infrastructure spending goes on. $100 of spending in 2022 now buys $53 in today’s world.

The construction industry is an important cog in the overall economic ecosystem. Each year it contributes more than $2 trillion to GDP and directly employs more than 8.7 million workers. Add in construction’s demand for materials, equipment and the entirety of its supply chain ‘When construction slows, the effects ripple through the economy,’ noted Sullivan.


Founded by award-winning economist Ed Sullivan, The Sullivan Report provides economic forecasts, research, and market intelligence for the cement, concrete, construction, and building materials industries - helping leadership teams anticipate demand shifts, manage risk, and plan with confidence.

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