Recession Effects on Southern Forest Industries

 

Sawmills in the South were hit hard by the recession. Photo courtesy of Wikimedia Commons.

Economic conditions from 2005 to 2010 accelerated sawmill closings and job losses and affected timber management across the southern United States, according to a report recently published online by the Southern Research Station (SRS) Forest and Inventory Analysis (FIA) unit.

Authored by Tom Brandeis, team leader for the FIA Resource Analysis Team, with fellow FIA researchers, Economic Dynamics of Forests and Forest Industries in the Southern United States brings together results from several separate analyses of FIA data, timber product outputs, forest industry-related job data, and trends in timber management for the Southern region during the economic recession years 2005 to 2010.

In 2007, Southern forests, known collectively as the “wood basket” of the Nation, accounted for 58 percent of the total timber volume harvested in the United States. The forests of the South are so productive that, even though they make up only two percent of forest cover worldwide, they produce 12 percent of the worlds industrial roundwood and 19 percent of its pulp and paper products—more than any other U.S. region or country in the world. But as economies declined during the recession, so did the need for building materials and other forest products.

“Our report shows that sawmills in the South were hit particularly hard by the recession, with output declining and mill closings on the rise,” says Brandeis. “This is largely due to the steep decline in housing starts. Our analyses show that softwood output fell 22 percent and hardwood output fell 30 percent during the recession years.”

This means loss of jobs and economic well-being for whole communities in the South, where wood-related business makes up 8 percent of all manufacturing income and 10 percent of all manufacturing employment. According to forest-related job data, during the same period the South lost 20 percent of total jobs associated with the wood products industry. This varied across the states, with a high of 35 percent of jobs directly tied to forestry industry lost in North Carolina.

“The economic downturn also affected how landowners managed their timberlands. We saw a decrease in the number of acres harvested but an increase in the amount of volume removed per acre,” says Brandeis. “We also found that though the acres harvested decreased, acres thinned or otherwise treated (burning, herbicide or other) increased, indicating that landowners may be putting off final harvest until the market improves while investing in activities that will increase the value of their timberlands.”

According to the report, if these trends continue, the result will be a higher proportion of forest stands with mostly larger-diameter trees across the region, and relatively fewer younger, more recently regenerated stands.

Available exclusively online, the e-report includes detailed information at the individual state level, as well as regional summaries and maps.

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