WVFA Mountain State Forestry Summer 2020

I N D U S T R Y N E W S 12 West Virginia Forestry Association Mountain State Forestry  | Summer 2020 www.wvfa.org In terms of total economic contributions, the WV FPI created a total of 16,058 jobs. This is a decrease of about 7% from 2017 data (Figure 1). Total labor income, total value added, and total output also declined from 2017 data (Figure 2). Specifically, the WV FPI contributed a total of $832.7 million in labor income in 2018 compared to about $870 million in 2017, a decline of 4%. Total value added in 2018 is $1.1 billion, a decline of 18% from 2017. In terms of total output, the industry contributed a total of $2.9 billion, which is a decline of about 11% from 2017. In both direct and total economic contributions, just like in previous years, the primary solid wood products sector remains the largest component of the WV FPI in 2018, followed by the secondary solid wood products sector. The reduction in the economic contribution of the forest products industry in 2018 could be attributed to the multiple rounds of tariffs and counter-tariffs between China and the U.S. during that year, which resulted in a 43% reduction in hardwood exports (AHEC, 2019). Domestic hardwood producers were negatively affected by these recent trade policies, particularly in rural communities like WV. For example, lumber prices have hit all-time lows for many species, mills have reduced operation hours or have laid off workers and, in some cases, have closed their operations (Moon, 2019). While the WV FPI has started to show recovery since the economic recession in 2008, the current trade policies are dampening this recovery as shown by the 2018 analysis. According to Moon (2019), “if this situation is not addressed, either by a trade deal or some sort of relief program, there is serious concern that the American hardwood industry will disappear…and with it all the related value-added production and spin-off jobs it supports.” Sector Employment Labor income ($MM) Value-added Output ($MM) Forestry 956 42.0 18.9 30.1 Logging 1,862 127.4 119.9 182.9 Primary solid wood products 2,799 142.5 218.2 852.5 Secondary solid wood products 2,533 129.3 169.1 494.8 Wood furniture 1,471 68.6 52.1 177.0 Pulp, paper, and paperboard mills 214 21.6 25.4 151.1 Secondary paperboard and other paper products 264 18.6 21.2 111.8 WV FPI 10,099 550.0 624.7 2,000.2 Sector Employment Labor income ($MM) Value-added Output ($MM) Forestry 1,174 51.6 35.7 60.7 Logging 3,310 176.5 191.0 311.9 Primary solid wood products 6,886 358.7 513.0 1,393.0 Secondary solid wood products 4,492 228.4 320.0 809.8 Wood furniture 2,165 103 106.7 284.1 Pulp, paper, and paperboard mills 814 53.8 75.4 255.4 Secondary paperboard and other paper products 489 30.2 40.3 148.5 WV FPI 16,058 832.7 1,092.3 2,896.7 Table 2. Direct economic contributions of the WV FPI major sectors in 2018 (dollar amounts reported in 2017 dollars). Table 3. Total economic contributions of the WV FPI major sectors in 2018 (dollar amounts reported in 2017 dollars).