Economic impact of forest products manufacturing in Georgia [summary fact sheet]

GEORGIA FORESTRY CO MM ISS I ON

The Economic Impact of Forest Products Manufacturing in Georgia

There are 163 wood product manufacturing facilities located in Georgia, which convert

GaT,ees.org

harvested forest materials to valuable products. These mills include 12 pulp mills, 9 engineered-wood product mills,123 sawmills and 19 other types of producers using logs

as a raw material. In addition, there are more than 1200 Georgia companies that further

convert manufactured wood products into more valuable products, such as furniture,

wood mouldings, paper products, containers, cabinetry, and other goods. All of these

companies together provide significant impact to Georgia's economy. The information below describes this

impact in terms of dollar output, number of jobs, and compensation to Georgians for the 2007 calendar year.

Direct Impacts

Chart 1: Percentage of Output for Forest Manufactoring Sectors in 2007

Georgia's forest industry in

2007 had an output of $18.5

billion, employed 64,192 persons, and paid $3.4 billion

10%

Logging and nurseries

dollars in compensation. The

Lumber and wood preservation

output and compensation levels were 4% higher and -

Veneer, plywood, and engineered wood

3% lower, respectively, than

Manufactured housing and prefab buildings

2006 levels without considering the effect of

a Pulp and paper products

inflation. Direct employment in forest product-related

7%

Machines - woodworking and paper

industries was reduced by

3%

Wooden furniture and cabinets

5%. The pulp and paper sector continues to provide

Windows and doors

the majority of impacts at 54%

of the total. The percentage

54%

impacts of all the major

Containers, showcases, shelving Custom architectural and misc.

sectors are shown in Chart 1.

Table 1 shows changes in

specific forest industry sectors from 2006 to 2007, while incorporating the affects of inflation.

Table 1.. Trends m. Econom,.c 0 UttPUt 0fforestind ustry

Output in 2006 dollars (millions)

Sector

2006

2007

Loaaing and nurseries

1,846

1.757

Lumber and wood oreservation

2,057

2,042

Veneer. olvwood, and engineered wood

1,260

1,285

Manufactured housing and prefab buildings

596

509

Pulo and oaoer oroducts

9,590

9,850

Machines - woodworking and paper

52

59

Wooden furniture and cabinets

1,176

1,164

Windows and doors

446

503

Containers, showcases. shelving

548

607

Custom architectural and misc.

190

172

Gain or Loss by Sector from 2006 to 2007

-89

-4.8%

-15

-0.7%

25

2.0%

-87

14.7%

260

2.7%

7

14.1%

-12

-1 .0%

57

12.7%

59

10.7%

-18

-9.4%

Total Impacts
In addition to direct impacts, the forest industry activities in Georgia provide indirect impacts and induced impacts. Indirect impacts result from the recirculation of resources caused by purchases of forest products by other industries. Induced impacts result from activities in the household sector made possible by household income flowing from the forest industry. Adding direct, indirect, and induced impacts yields total impacts. The total impact of the forest industry in Georgia in 2007 included $28.5 billion in output, 141 ,155 jobs, and $6.7 billion in compensation to employees and proprietors (+3%, -5%, and -1 % over 2006 levels respectively). Trends in these indicators since 2001 are reflected in Chart 2. You will notice that total output was essentially flat in real terms (considering inflation).
Chart 2: Economic Impact Trends of the Forest Industry in Georgia

3l'.0
30.5 30.0

25.0

f 20.0
~

0
C

16.0

IC
.2 10.0
ii

l'.0

2"0,000
200,000
150,000
'E
411
r E
100,000
0.
w E
50,000

0.0
2001 2002 2003
- output in nomina l d o llars -

0
2004 2005 2006 2007
I output in rea l 2 001 dollars - Emplo ym e nt

Industry Ranking The forest industry ranks 2nd in Georgia behind food processing, when considering compensation to employees and proprietors. While the food processing industry totaled $3.0 billion in compensation, the forest industry was slightly less at $2.7 billion. Forestry ranks third behind textiles and food processing when considering number of employees.
Other Forest Industry Facts
Forestry activities result in $566 million in taxes and other payments to Georgia's state budget. Harvesting 6400 tons of wood each year creates one job in the harvesting and nursery sector of the
industry. Forty nine (49) of Georgia's counties are considered either moderately dependant, very dependent, or
critically dependant on the forest industry because of the proportion of income received by residents from forest product companies within the counties.
References
Riall, Bill; Various reports on the economic impact of the forest industry, 2001-2007; Enterprise Innovation Institute, Georgia Institute of Technology; 2007
Willard , Risher; verbal communication regarding the number of forest product mills determined by a Georgia Forestry Commission survey, 2008