Ellen Simpson - February 08, 2010
Montana Wood Products Association
Good News for the Timber Industry
KUFM COMMENTARY – FEBRUARY 8, 2010
Most likely a logical person would not have come away from the recent Outlook Seminar with positive thoughts, but that is exactly what happened. The UM Bureau of Business and Economic Research folks are travelling around doing their annual seminar and, as always, two parts of the presentations deal with manufacturing and forest products.
The manufacturing segment of Montana’s economy is the place wood products are located because of the value-added nature of the businesses. Manufacturing accounts for more than 20 percent of the State’s economic base and wood products remains a major player. Manufacturing employed 21,400 Montanans in 2009 with over 7,000 of those jobs in the forest products arena.
While Montana was behind in the global recession and really did not get hit until 2009, wood products manufacturing has been suffering longer mostly because of record low market prices and the nationwide housing slump. Our timber harvest volume during 2009 was an estimated 300 million board feet which is not enough to sustain the current infrastructure.
So, why be optimistic? Several reasons have popped up in the last couple of months that can cause one to look at a half full instead of half empty glass. The annual scientific poll of 600 Montana voters conducted by the Montana Chamber of Commerce was very encouraging for those of us in the natural resources industries. Montanans want to see more business growth with 78 percent wanting more timber harvesting, 76 percent more oil and gas development, and 71 percent more coal development. These industries traditionally pay high wages with benefits like health insurance and Montana voters apparently want these types of economic development.
Another reason for optimism are the 2010 projections from various sources that 2009 was the bottom for mills and lumber demand will grow as housing starts move upward along with repair and remodeling. It is predicted that lumber demand will rise 11 percent and housing starts will increase 21 percent. While these numbers are below 2005 levels, which were the highest in history, the upward trend means movement in the right direction.
More than half of the timber industry folks surveyed for the Outlook Seminar anticipate production, product prices, and sales will increase in 2010. The largest fly in the ointment for the industry continues to be lack of fiber supply from federal lands. The amount of timber harvested from those lands did increase in 2009 over 2008, but would need to double in order to maintain current infrastructure needs.
The 7,070 Montanans employed in timber hold direct jobs in our communities. Each direct job in this industry results in three indirect jobs throughout the rest of the economy. Simply put, the indirect jobs provide employment for another 21,000 hard-working Montana families. That is why it is so crucial to all of Montana’s economy to do everything possible to maintain and grow timber industry employment.
The Montana DNRC JumpStart projects are a shining example of how dollars well-spent on needed projects can produce jobs and treat the land. The State received about $7 million to fund projects in counties with high unemployment rates. Some projects are still underway, but more than 15,000 acres have been treated and 145 jobs created or sustained in the timber industry. The purpose of the projects was fire protection through thinning and removal of bug infested and diseased trees. These treatments have been applied to over 200 private parcels and state trust lands.
A calculation from the University of Massachusetts Political Economy and Research Institute shows job creation per $1 million investment. Reforestation, land and watershed restoration, and sustainable forest management produce nearly 40 jobs for each $1 million invested in those on-the-ground activities. The JumpStart projects are only one example of how this happens and what this kind of investment means to Montana’s economy and our land resources.
While there are obstacles in our way on the slow road to economic recovery, I do remain positive that there is a future for the timber industry and for the fine folks who work in it.
On behalf of the Montana Wood Products Association based in Helena, I am Ellen Simpson. Thanks for listening.
|
|
