The economic impact of forest products manufacturing in Georgia

The Economic Impact of Forest Products Manufacturing in Georgia

35.0

250,000

Billion Dollars Employment

30.0

1.800.GATREES

gatrees.org

25.0

200,000

20.0

150,000

Forestry is the

15.0

2nd largest

100,000

10.0

Georgia industry

50,000

5.0

Total impacts

0.0 2001

2002

2003

2004

2005

Output

Income

Employment

0 2006

The forest industry in Georgia in 2006, including the multiplier effects to other parts of the economy were: $27.7 billion in output, 149,347 jobs, and $6.8 billion in compensation to employees and proprietors (+7%, -1%, and -3% over 2005 levels respectively). Trends in these indicators are reflected in the chart above.

Direct Impacts

Georgia's forest industry in 2006 had an output of $17.8 billion, employed 67,733 persons, and paid $3.5 billion dollars in compensation. The output and compensation levels were 10% and 3% higher, respectively, than 2005 levels without considering the affect of inflation. However, employment remained stable. Changes in specific forest industry sectors from 2005 to 2006 are reflected below:

Sector
Logging and nurseries Lumber and wood preservation Veneer, plywood, and engineered wood Manufactured housing and prefab buildings Pulp and paper products Wooden furniture and cabinets Windows and doors Overall

Output 28% 14% -2% 6% 9% 10% 10% 10%

Changes 2005 to 2006

Employment

Compensation

0%

5%

1%

4%

-2%

4%

-1%

1%

-1%

2%

5%

6%

6%

-4%

0%

3%

Page 2

The pulp and paper sector of the forest industry continues to dominate the industry by producing 54% of the industry output. The relative impacts of the remaining sectors are shown in the chart below. Although the pulp and paper industry output as a whole seems to be recovering from the recession period earlier in this decade, the employment levels continue to decline. This may be an indication of individual U. S. companies developing strategies to become more competitive with other internationalbased companies. The opportunity for these companies to add new products, such as biofuels, to their production lines could spawn new investments followed by increased overall economic impact in the coming decade.

Output of Specific Forest Manufacturing Sectors

Logging and nurseries

3% 1%

10%

7%

0%

12%

7%

Lumber and wood preservation
Veneer, plywood, and engineered wood Manufactured housing and prefab buildings Pulp and paper products
Machines - woodworking and paper

3%

Wooden furniture and cabinets

Windows and doors

54%

Containers, showcases, shelving

Custom architectural and misc.

Industry Ranking

The forest industry ranks 2nd in Georgia behind food processing, when considering compensation to employees and proprietors. The forest industry has total compensation within 4% of the food processing level. Forestry ranks third behind textiles and food processing when considering number of employees.

Other Forest Industry Facts
Forestry activities result in $580 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.
Georgia has 12 pulp mills, 9 engineered-wood products mills, 140 sawmills/pole mills, and over 1200 other industries that provide secondary processing to Georgia's wood products.

Reference Riall, Bill; Various reports on the economic impact of the forest industry, 2001-2006; Enterprise Innovation Institute, Georgia Institute of Technology; 2007