Forest Products Industry Size and Economic Multipliers in the US South

The forest products industry (FPI) is an important component of local, state, regional, and national economies. Thus, assessing its economic contribution can provide valuable information to policymakers and forestry interests. IMPLAN, an input output model, was used to assess the economic contribution of the FPI in 13 US southern states for the year 2009, individually as well as regionally, and to compare it with that in 2001, the last comprehensive study of the industry in the South. Two aspects of economic contribution, direct impacts and associated economic multipliers, were estimated for three primary FPI sectors (lumber and wood products, paper and allied products, and wood furniture). The FPI in the South employed 470,000 individuals and generated $133 billion of gross output. The industry's employment decreased by 33.9 percent while gross output increased by 15.1 percent between 2001 and 2009. Study findings reveal that the FPI reduced employment relative to total industry output to maintain production during the recession period providing evidence of capital substitution for labor. This implies that despite the disproportionate impacts of the great recession of the 2000s, the industry is still an important component of the South's economy. Thus, this article will provide insights about how the economic contribution of the FPI changes over time. In addition, results of this study will be helpful in identifying important industry shifts and help formulate policies and regulations to support the FPI.