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First Half of 2014 Reveals Continued Improvements for Montana Wood Products Industry

August 01, 2014

MISSOULA – The first half of 2014 was the strongest that Montana’s wood products industry has experienced since 2009, according to a University of Montana researcher.

Todd Morgan, director of forestry industry research at UM’s Bureau of Business and Economic Research, said wages paid to production workers in the first half of 2014 were up 20 percent, the number of production workers was up 3 percent and lumber production increased about 4 percent at Montana sawmills compared to the first half of 20

The continued increases are good to see, Morgan said. Growth in the second quarter was slower but still improved from 2013 and the previous three years.

“Montana wood products results for 2009 and 2010 were the lowest since the end of World War II, and their recovery has been slow but fairly steady,” Morgan said. “U.S. homebuilding has increased more slowly than predicted for years and is still not back to its long-term average, which has contributed to slow growth in Montana’s wood products industry.”

Montana’s plywood, particleboard and medium-density fiberboard production levels were somewhat lower in the first half of 2014 than for the same period last year, but that was pretty much the case across the country with slower-than-expected housing starts.

According to Morgan, production wages in Montana experienced the most substantial growth. At $37.4 million for the first six months of 2014, wages were 20 percent higher than the first half of 2013. The number of production workers employed during the first half of 2014 increased to 1,698 – the highest it has been since 2009 – and more than 115 workers higher than the first half of 2011.

Annual lumber production in Montana is up almost 40 percent from the 2009 low, but still well below where it was in 2007 and 2008, Morgan said. About 294 million board feet of lumber was manufactured in Montana during the first half of 2014 compared to 283 million board feet in the first half of 2013 and about 264 million board feet on average for first halves of 2010 through 2012.

“Most mills in Montana are still operating below full capacity and have not yet added additional shifts,” Morgan said. “Log supply continues to be the key issue currently limiting production, as opposed to markets for finished products. Delivered log prices at Montana mills increased about 10 percent from the first to second quarter of 2014 and are about 15 percent higher than in the second quarter of 2013. Production and associated employment and wage increases have been somewhat stronger on the West Coast, with more timber available for harvest and better access to the Asian markets.”

Wage, employment and production numbers refer only to Montana production workers at timber-processing facilities and mills that use wood residue. Production workers account for 40 to 50 percent of the workers in Montana’s forest products industry. Estimates do not include several thousand workers in logging, trucking and other related jobs.

The Bureau of Business and Economic Research at UM is a research center producing economic and industry data for Montana. For more information visit http://www.bber.umt.edu/fir.

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Contact: Todd Morgan, director of forest industry research, UM Bureau of Business and Economic Research, 406-243-5113, todd.morgan@business.umt.edu.