A cooling global economy is helping builders and contractors in Maine.

Economists are forecasting a sharp slowdown this year in construction globally, particularly in China, which is pulling down prices for a range of construction materials.

A crew works on a new home in Gorham last summer. Recent employment statistics from an industry group ranked Maine 48th in the country for construction job growth. 2014 Press Herald file photo/John Patriquin

The price of copper, for instance, fell 14 percent last year and has declined another 10 percent just this month. Analysts surveyed by Bloomberg say they expect those prices to continue to fall for much of the rest of the year.

That’s because China, which consumes 45 percent of the world copper supply, is cutting back on purchases for its construction industry amid a slowing economy. And dark clouds are starting to form around the prospects for the rest of the world: The World Bank earlier this month cut its forecast for global growth in 2015 from 3.4 percent to 3.0 percent.

The weakening global economy contrasts with a strengthening U.S. economy that positions local construction and renovation markets for very busy seasons.

Angelia Levesque, a Bangor real estate broker, said some contractors in her area are building houses on spec, meaning there’s no firm buyer when they break ground. She also sees investors buying houses to fix up and then resell – flipping. Levesque said this is the first time she’s seen major activity in those sectors since the recession.

Levesque, who will be making a presentation on Maine’s single-family housing market Jan. 22 at the Maine Real Estate and Development Association’s annual forecasting conference in Portland, said the real estate market in southern Maine is even better, meaning new home construction is expected to be very strong this year.

“Southern Maine is such a good market for new housing construction because of the lack of inventory,” she said.

“We’re seeing a very robust construction market, particularly in the commercial side of the business,” said Scott Tompkins, the business development director of PC Construction Co., a Vermont-based contractor with a major presence in Maine.

DEMAND WAS ALREADY GROWING

Tompkins said pent-up demand for new construction and deferred maintenance projects are largely behind a surge in construction that began last year and is carrying through into 2015. With the cost of materials coming down, he said, contractors can be more aggressive in their bidding on jobs and count on materials savings as they work through their projects.

Falling oil prices also are contributing to savings for contractors because a lot of construction materials, such as asphalt and roofing, are petroleum-based, he said. Lower oil prices even mean that things like deliveries of construction items will be less costly, Tompkins said.

Tompkins said Maine builders have been on the opposite side of supply and demand in the past, so the price direction of the materials markets is welcome news. He said that after the 2004 Indian Ocean tsunami, gypsum drywall was almost impossible to obtain and prices shot up because so much of it was sent to Thailand, Indonesia and other markets for rebuilding efforts.

That drove up prices even more at a time when domestic markets were already running at peak production before the housing bubble burst three years later.

Now, however, prices are undergoing a sharp reversal.

“It’s been pretty high, but it’s started to come down,” Jim Robinson, owner of Mainely Plumbing, said of copper. Robinson said plumbers have already been cutting back on their use of copper in favor of PEX, a more flexible and cheaper hose-like material for a range of plumbing uses. Copper is mainly used around boilers and for water mains coming into a home, he said.

COPPER, OIL PRICES DOWN

Nathan Bassett, president of Portland Winnelson, a South Portland-based plumbing supplier, said his prices for copper tubing have fallen about 12 percent since last August. The price of PEX also is coming down because it’s a petroleum-based product. So whichever material a plumber uses, it’s likely to cost significantly less than last year.

He said a consumer might expect to pay $2.07 a foot for copper and PEX is about half that cost.

Robinson said it all adds up to a good outlook for construction this spring, as long as projects aren’t pushed back by a long winter, like last year.

“When you’re called up to do a renovation on a 7,500-square-foot summer home, you know it’s going to be pretty good,” he said. “And that’s for a family of three.”

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