Economic Trends Plague Wood Products Industry

By Beacon Staff

MISSOULA – A University of Montana researcher says weakness in the U.S. housing industry and an uncertain timber supply are plaguing Montana’s wood products industry, with potential repercussions for years to come.

Montana had 3,068 mill production workers in the state in the first half of this year, down from 3,330 in the first half of 2007 and more than 3,500 during the same period in 2006.

“Recent closures and curtailments of sawmills and plywood facilities related to the troubled housing market have hurt employment and wages in Montana’s wood products industry,” said Todd Morgan, director of forest industry research at UM’s Bureau of Business and Economic Research.

He said that, when markets improve, the extent to which Montana’s industry recovers will depend largely on timber availability. The wood products industry accounts for 10 percent of Montana’s economic base.

Mill production wages fell below $60 million in the first half of 2008. Wages exceeded $66 million in the first half of 2006. Lumber production is also dropping.

“Job losses, reduced wages and declines in lumber production can be painful but temporary issues that pass when conditions improve in the broader housing and wood products markets, or these conditions could persist and worsen,” Morgan said.

The industry still employs more than 9,000 workers who earn about $400 million in labor income annually. Wood products wages in Montana are 22 percent higher than the average wage across all industries.