And Todd Morgan, director of forest industry research at UM's Bureau of Business and Economic Research, said the declines threaten to permanently erode one of the state's major industries.
“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. “With the uncertainty that surrounds timber availability in Montana, it can be difficult to rebuild capacity when markets eventually rebound.”
Montana had 3,068 mill production workers in the first half of this year, down from 3,330 in the first half of 2007 and from more than 3,500 during the same period in 2006.
Mill production wages fell below $60 million in the first half of 2008. Wages were just under $64 million in the first half of 2007 and exceeded $66 million in the first half of 2006.
Lumber production from Montana sawmills in the first half of this year was 387 million board feet, down 9.2 percent from the first half of 2007 and 21.2 percent from the first half of 2006.
Morgan said the ability of Montana's wood products industry to recover will depend on trade issues, an improved housing market, greater availability of timber from national forestland, and other issues.
Montana mills used to rely on national forests for most of their logs, but lawsuits and policy changes have vastly reduced timber harvesting by the U.S. Forest Service, Morgan said.
The lawsuits have forced the agency to spend more time on environmental analyses for proposed timber cuts, while federal policy changes include a greater emphasis on wildlife habitat, water quality, recreation and other priorities, he said.
“The extent to which Montana's industry recovers when markets improve will depend largely on timber availability,” Morgan said. “There's plenty of timber, but getting it to the mill is a different issue.”
In 2007, a total of 516 million board feet was harvested from public, private and tribal timberlands in Montana, a decline from
1.3 billion board feet in 1987.
Morgan said he does not expect Montana's wood products industry to improve significantly in the remainder of the year, but said increased timber harvesting is needed to properly manage the state's forests, especially in forest fringe communities with substantial wildfire risks.
“There are social, ecological and economic issues at play,” he said.
Despite declines in wood products employment, wages and production, the industry continues to be an important part of the Montana economy.
Morgan said the wood products industry, which includes loggers and employees at wood and paper manufacturing facilities, employs more than 9,000 workers who earn about $400 million in labor income annually. The industry accounts for 10 percent of Montana's economic base.
At the local level, the industry plays a larger role, accounting for 12 percent of the economic base in Ravalli County, 13 percent in Missoula County and 23 percent in Flathead County.
Wood products wages in Montana are 22 percent higher than the average wage across all industries.
Gordy Sanders, resource manager at Pyramid Mountain Lumber Co. in Seeley Lake, said he wasn't surprised by the declining numbers for the first half of 2008.
“We've had two and a half years of depressed market conditions that are really pushing hard on the industry in general,” he said. “Everyone's challenged.”
Ed Nesselroad, a spokesman for the Forest Service's Northern Region, said the federal timber supply is one part of a larger picture facing Montana's wood products industry.
“Market factors have a much greater effect,” he said. “There's housing demand, imports, international trade issues, policy issues, legal issues. It's a very complicated picture.”
Nesselroad said the Forest Service considers Montana's mill infrastructure as essential in helping to manage public forests.
“You can manage with a chain saw, a match with prescribed fires, and other means, but the component of mechanical timber treatment is very important.”
Reporter John Cramer can be reached at 523-5259 or at john.cramer@missoulian.com.
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