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2.1 Economic growth, diversity and dependency

The economy of the South has grown in proportion to the growth in population and in concert with changes in the national economy. From a primarily agrarian economy in 1850, the South became a center for U. S. manufacturing. More recent growth has focused on the service and technology sectors, increasing the diversity of the southern economy. Through all these developments, the South's forests have provided raw materials for wood products industries as well as beauty and recreational opportunities for an increasingly wealthy population.

The South remains largely rural, with higher poverty and lower income than more urbanized regions (Ghelfi 2001, Gibbs 2001, Cook and Mizer 1994). Some areas are still highly dependent on a single industry, including timber, lumber, furniture and pulp and paper. The rural areas are still part of the "old economy" based on manufacturing and resource extraction (Gale and McGranahan, Gibbs 2001). Recent growth in southern rural areas was led by industrial machinery and equipment manufacturing , followed by food and then wood processing (Gale and McGranahan). Dependency, and in particular dependency on resources and manufacturing, is often cited as a contributor to lower economic well-being, but recent studies have found that southern rural counties with greater than 20 percent of employment in manufacturing are better off than counties with less than 20 percent (McGranahan). Increasing diversity in local economies, and reducing dependency, is often a goal of public policy (Wagner and Deller 1998).

Recent forest assessments in the South include two sub-regional assessments completed for the two mountain regions, the Southern Appalachians (Southern Appalachian Man and the Biosphere 1996) and the Ozark-Ouachita Highlands (USDA Forest Service 1999). The most recent southwide assessment was The South's Fourth Forest (USDA Forest Service 1988), which covered essentially the same region as the current Assessment, but focused nearly exclusively on the wood products sectors. The two subregional assessments concluded that wood products were important, but not dominant, and that populations and income were increasing, leading to increased demand for recreational services. Manufacturing and farming were still significant aspects of local economies, but were declining in importance. The South's Fourth Forest noted that "timber is usually considered the most important [sector] in economic terms" (p. 10). The national forests were reported to have contributed over $124 million to the local economy but accounted for only 6 percent of regional forestland.

After the Civil War, manufacturing, and in particular wood products, emerged as dominant southern industries. As incomes increased after World War II, the amenity and recreational values of forestland became more important. Recreation and timber are the primary forest-based economic sectors today, and this chapter focuses on the roles of these two sectors in the southern economy. Wood products industries include timber production on both public and private land and the subsequent harvesting and processing into wood, furniture, or paper products. Recreation and tourism in forests includes camping, hiking, sightseeing, hunting, fishing, biking, and other activities. The economic impacts of these activities are measured in terms of the expenditure by each person for each day of activity.