Where Do U.S. Forest Products Stand Globally?

New report charts recent declines

The decline in housing starts in the U.S. during the recession affected U.S. global forest products market shares. Photo courtesy of Bugwood.org.
The decline in housing starts in the U.S. during the recession affected U.S. global forest products market shares. Photo courtesy of Bugwood.org.

A newly published report by U.S. Forest Service researchers shows that since the 1990s the U.S. share of the global forest products market has declined as a result of decreases in U.S. construction and paper manufacturing. Forest Service Southern Research Station (SRS) economists Jeff Prestemon and David Wear and SRS staff Michaela Foster authored the general technical report just published online by SRS.

The U.S consumes and produces more forest products than any other country in the world; the importance of the forest products sector to the U.S. economy cannot be overstated.  In the last decade, the forest products industry has changed rapidly, both domestically and internationally, due to changes in related sectors and other factors.

“Decisionmakers in both the public and private sectors are interested in knowing more about what’s causing these changes and how different factors might affect future forest products markets,” said Prestemon, project leader for the SRS Forest and Economics Policy research unit. “This report provides an explanation for why the U.S. share of the global forest products market has changed and offers insights into how it might change in the future.”

The researchers reviewed data from 1961 to 2013 to evaluate the extent of decline in the U.S. share of the global roundwood market. They found that the U.S. global share peaked at 28 percent in 1998, and fell below 20 percent during the 2007-2009 recession, where it remained through 2013.

“We attribute the decline to a combination of cyclical factors, most notably the fall in construction in the U.S. and the long-term decline in U.S. paper manufacturing,“  said Prestemon. “The latter is connected to the reduction in the total output of U.S. manufacturing in general, a decline in output of specific products requiring paper in their manufacture or packaging, and the precipitous drop in paper demands for newsprint and advertising as electronic media have partially supplanted their use by consumers.”

Housing starts in the U.S. averaged 1.5 million per year from 1960 to 2000. The report’s authors note that continuing population growth combined with steady economic growth since the recession should raise future demands for housing construction. A return to the average housing start level of 1.5 million per year would bring the U.S. share of the global forests products market back up to prerecession levels of 22 to 24 percent, but long-term trends in general manufacturing and the paper market will probably keep market share from returning to the peak level of 28 percent.

“But there are many key unknowns. While U.S. forest product outputs are dominated by domestic economic activity, the effect of trade is increasingly important,” said Prestemon. “Most notably, the growth in manufacturing output in China has shifted paper production toward Asia, where paper is needed for packaging much of this growing manufacturing output. On the other hand, growing demand for wood to support Asia’s paper and burgeoning furniture industry could lead to growing demand for U.S. exports of pulp and hardwood logs to that region in the long run.”

The report includes analyses of the underlying forces causing shifts in production and demand in different sectors of the domestic and international wood products markets, including developments in policies, programs, technologies, and consumer preferences.

Access the full text of the report.

For more information, email Jeff Prestemon at jprestemon@fs.fed.us


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