A New Study Shows That 2011 Wasn't a Very Good Year for The Forest Products Industry

MISSOULA- A new study performed by the University of Montana's Bureau of Business and Economic Research shows that 2011 wasn't a very good year for the forest products industry in the Treasure State. The industry saw a big drop during the recession in 2010 and while lumber production, employment of mill workers and wages stabilized a bit in 2011, the numbers were still at levels about half of what they were during the peak year of 2005. Todd Morgan, director of forest industry research at UM's Bureau of Business and Economic Research, said the slow recovery from the recession and ongoing U.S.Housing slump are still impacting Montana's forest products industry. "Montana's forest industry will continue to deal with a combination of local and regional factors that make major recovery in the near term unlikely," he said. Lumber production at Montana sawmills in the fourth quarter of 2011 fell to approximately 121 million board feet, down 8% from the third quarter of 2011 while total Montana lumber production for the year stood at about 499 million board feet, down about 1% from 2010. But when compared with 2005, when U.S.Housing starts were at their peak, Montana lumber production in 2011 was down 50 percent. BBER's quarterly reports on the industry show that the number of production workers employed in Montana mills during the fourth quarter of 2011 was 1,567, off by less than 1% from the third quarter of 2011, but about 57% fewer production workers were employed in Montana mills during 2011 than during 2005. The job losses from curtailments and permanent mill closures during the post-boom period continue to be reflected in the state's forest industry employment figures. One bright sport was that wages at mills remained stable during the fourth quarter of 2011, sitting at $14.2 million during the fourth quarter of 2011, versus $14.5 million during the third quarter.And total 2011 production wages were $57.5 million, up approximately 2% from 2010. Log prices in Montana have remained relatively flat the past three years and the report shows that the expected demand for logs at Montana mills over the next 60 days is good, while mills deal with the continued lack of demand for their finished products. Local log prices have not risen as much as in the Pacific coast region, which enjoys ready access to international log markets and Montana mills could face higher log prices from competition with exporters. More than two-thirds of Montana's mill managers reported a significant shortage of raw material as few mills have full log yards, and several mills are still actively purchasing timber to ensure a sufficient log inventory going into the spring break-up, when the ground is usually too soft and wet for logging. Source: kpax.com