Weak Markets Continue to Impact Montana Forest Products

By Beacon Staff

MISSOULA – A University of Montana researcher says lumber production, mill worker employment and wages have declined substantially in Montana’s forest products industry for a third straight year.

Todd Morgan is director of forest industry research at UM’s Bureau of Business and Economic Research. He says 2008 was a difficult year, with the global recession and ongoing U.S. housing slump.

“Since 2006, poor market conditions have surpassed limited timber availability as the primary negative factor impacting Montana mills,” Morgan said.

The Missoulian newspaper reported his findings Friday.

Compared with 2005, when U.S. housing starts peaked, 2008 Montana lumber production was down 32 percent, Morgan said.

The number of production workers employed in Montana mills during the fourth quarter of 2008 was 2,716, down 5 percent from the third quarter. About 715 — or 20 percent — fewer production workers were employed in Montana mills during 2008 than during 2005.

Morgan said the permanent closures of the Stimson plywood plant and sawmill in Bonner in 2007-2008 and of Owens & Hurst in Eureka in 2005 account for more than 530 of the jobs lost.

Production wages at mills also fell during the fourth quarter of 2008. Wages were just $24.6 million during the fourth quarter, versus $28.8 million in the third quarter.

Morgan said the steep drop in wages is largely because of shortened work weeks, reduced number of shifts, temporary curtailments, pay cuts and other efforts by mills to keep costs down while still retaining employees.

Total 2008 production wages were $112.2 million, down 17 percent from $135.6 million in 2005.

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