fedgazette

Grim outlook for timber industry

Montana State Roundup

Published July 1, 1992  |  July 1991 issue

Montana's timber industry will shrink by 25 percent to 30 percent over the next five to 10 years according to 1991 projections published by the University of Montana.

Charles Keegan III, director of forest products industry research at the university's Bureau of Business and Economic Research in Missoula, says that even those numbers may be optimistic, despite a second quarter rise in timber prices. "Prices are better than predicted and better than the housing market and construction industry in general would dictate," Keegan says. He attributes this "blip" in his forecast to the inability of West Coast producers to meet demands, largely as a result of lawsuits by environmental groups.

Nonetheless, Keegan doesn't see anything that will turn the timber industry around. Less timber will be available for harvest from national forests in northwest Montana and an anticipated drop in harvests from private timberlands.

"There will be losses of large parts of western Montana's economy," Keegan says. "Some rural wood products counties don't have anything else." And based on previous experience in eastern Montana following downturns in the agricultural and gas/oil economies, Keegan also predicts that people will leave the state.

Carol Daly, executive director of the Flathead Economic Development Corp., doesn't expect an exodus. An April study, conducted by the development corporation and funded by the US Forest Service, found that most people don't plan to leave the area. And Daly worries about the potential for increased social costs in the region as a result of growing unemployment.

While two of the four western Montana counties (Lincoln and Sanders) noted in the Flathead study are reliant on timber, Lake and Flathead counties are cushioned because of manufacturing and services industries and a strong tourism trade. But Daly expects them to feel the impact too. "Timber offers some of the highest paying jobs in the area, and that loss of jobs will trickle back down through the economy. People won't buy washing machines, houses or cars." And the 25 percent of timber profits that go to support roads and schools in Montana will have to come from somewhere else, Daly adds.

The region doesn't intend to wait for Keegan's predictions to become fact, however. The Development Corp. study recommends that Montanans:

  • Deal with the change in the timber economy as a community problem with wide public involvement.
  • Increase information-sharing with other states and regions facing the same problem.
  • Encourage development of value-added wood products businesses.
  • Ask the state and the Montana Science and Technology Alliance to help with funding and services.

Daly also says the industry needs to look at wood waste, that is, the chips and other parts of trees generally discarded, and build new businesses on that commodity.

But, there's no easy way out, Daly says. "There's a whole lot of change happening, and it's permanent change. We can't ever do it again like granddad did it."

Kathy Cobb

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