Copper buyers will have less trouble sourcing the red metal this year as a succession of bad news on the economy—including poor bank earnings, falling construction rates and rising expectations that overall gross domestic product (GDP) growth will slow—is driving many copper market watchers to revise their 2008 copper demand forecasts.

U.S. copper consumption for construction and manufacturing has been sliding for the past two years. Last year, the U.S. and Canada consumed an estimated 5.4 billion lbs of copper, a 3% decline from the year before, and new outlooks for 2008 see further slippage.

"Copper demand is probably falling 8% per annum in the U.S.," says Jon Bergtheil, head of global metals strategy at the J.P. Morgan Securities offices in London. Not quite as bearish is Larry Edelson at Weiss Research in Jupiter, Fla., who forecasts that refined copper consumption will fall by 3.3% this year. Still, their views now erase earlier forecasts of a 4% rebound in 2008.

Standard Bank analysts looks at poor residential construction figures as a key indicator of copper demand in the U.S., citing the fact that housing starts charted by the Commerce Department dropped by a faster-than-expected 14% in December to the lowest monthly level in more than 16 years. Another weak indicator for copper is that building permits also fell more than expected in December by 8% to 1.07 million units. For the year, permits were the sharpest seen in more than 25 years. From early 2006 levels, housing starts have declined by 56% and permits for new construction are down 52%.

Still, overall, the world price of copper remains around or above $3/lb for what would be the third consecutive year. Edelson says "copper's price has recently been strengthening even in the face of the U.S. slowdown. That could be signaling that Asian economies, where much of the demand for copper is coming from, remain buoyant, steaming ahead."