Idaho Forest Products Industry Not So Optimistic for 2009

Tuesday, March 3 2009


March 3, 2009

Written by Jason Brandt

MOSCOW, Idaho – Lumber production, employment and sales declined in Idaho’s forest products industry during 2008, and conditions are expected to worsen in 2009, according to researchers at the University of Montana and University of Idaho.

“As in Montana, the ongoing housing slump and financial turmoil hurt Idaho’s forest products industry during 2008, and are casting a dark shadow on the 2009 outlook,” said Jason Brandt, assistant director of forest industry research at UM’s Bureau of Business and Economic Research (BBER). Tom Gorman, head of the University of Idaho’s forest products department, said the near term outlook is the worst in the past 50 years.

In cooperation with the University of Idaho, the BBER conducts an annual survey of Idaho’s forest products manufacturers as part of the ongoing activities of the Inland Northwest Research Consortium. Results of the survey indicate that wood products manufacturers in Idaho are expecting even weaker market conditions for 2009, after three straight years of declines. Respondents to the 2008 survey included more than 60 of Idaho’s largest wood-using facilities, as well as numerous smaller mills.

More than two-thirds of the responding wood and paper manufacturers indicated a decrease in profits for 2008 relative to 2007. More than 60 percent reported decreases in production and number of employees, and increases in curtailments during 2008.

Idaho’s wood and paper products sales value for 2008 decreased about nine percent from 2007 to just under $1.7 billion, and the number of forest industry workers (including the self-employed) dropped by approximately 10 percent to about 13,500. Lumber production fell to about 1.6 billion board feet, down about nine percent from 2007. Timber harvest declined across all ownerships, falling to just under 1.0 billion board feet Scribner, a decrease of about four percent from 2007.

“Demand for lumber and other wood products is expected to remain low into 2010 because of the problems in the U.S. housing market and international financial conditions,” Brandt and Gorman said.

Idaho’s wood and paper product manufacturers are not displaying much optimism about 2009, with 44 percent of the respondents expecting the year’s operating conditions to be worse, and 40 percent expecting to see no improvement from 2008. The employment outlook is likewise not looking very optimistic, with 37 percent of respondents indicating expected decreases in employment for 2009. Slightly less than one-half of Idaho’s wood products manufacturers are expecting profits to decrease, while 33 percent expect to see no change in profits during 2009.

Nearly all the wood product manufacturers surveyed in Idaho mentioned general market conditions and the overall economic condition as the major issues that will affect their operations in 2009.

“Idaho’s Forest Products Industry: Current Conditions and Forecast 2009,” published by Idaho Forest, Wildlife and Range Experiment Station in Moscow, Idaho, is available at University of Idaho’s Forest Products and the BBER Web site http://www.bber.umt.edu/forest/pdf/IdahoOutlook/ID2009.pdf.
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About the University of Idaho
Founded in 1889, the University of Idaho is the state’s flagship higher-education institution and its principal graduate education and research university, bringing insight and innovation to the state, the nation and the world. University researchers attract nearly $100 million in research grants and contracts each year; the University of Idaho is the only institution in the state to earn the prestigious Carnegie Foundation ranking for high research activity. The university’s student population includes first-generation college students and ethnically diverse scholars. Offering more than 150 degree options in 10 colleges, the university combines the strengths of a large university with the intimacy of small learning communities. For information, visit www.uidaho.edu.

Media Contacts: Fran Wagner, College of Natural Resources Department of Forest Products; (208) 885-6700, fwagner@uidaho.edu; Jason Brandt, Forest Industry Research, University of Montana Bureau of Business and Economic Research, (406) 243-5113, Jason.Brandt@business.umt.edu.





About the University of Idaho
The University of Idaho helps students to succeed and become leaders. Its land-grant mission furthers innovative scholarly and creative research to grow Idaho's economy and serve a statewide community. From its main campus in Moscow, Idaho, to 70 research and academic locations statewide, U-Idaho emphasizes real-world application as part of its student experience. U-Idaho combines the strength of a large university with the intimacy of small learning communities. It is home to the Vandals. For information, visit www.uidaho.edu.