Logging Employment Constraints Threaten Forest Industry Growth

by Shawn Baker

This post is the third in a series related to the Q4 2022 Forisk Research Quarterly (FRQ), which includes forest industry analysis and timber price forecasts. This post includes excerpts from the Forest Operations chapter.

The most recent Bureau of Labor Statistics data on logging employment (covering Q1 2022) showed a 2.5% year-over-year decline in southern logging employment. Falling southern employment is a concern given the geographic shift in forest industry activity towards the U.S. South. The last five quarters of data available in the Southeast and South-Central U.S. marked the lowest logging employment levels on record for those regions. The U.S. logging industry is smaller than it has been since the Bureau of Labor Statistics began tracking data following World War II despite high levels of production (Figure 1). Since timber harvesting levels peaked in the late 1980’s to early 1990’s, through the last reported data in 2016, total harvest levels fell 18% while logging employment declined nearly 40%. Industry output increased over the last five years in step with growing housing demand, suggesting harvest levels rose as well, yet employment continues to fall.

Maintaining (or growing) harvest levels with declining employment is not possible without continued improvements in logging productivity. In fact, since the late 1950’s, logging output per employee is up nearly 150% (Figure 2). Growth came in phases through much of the 20th century, with development of reliable, single-operator chainsaws, followed by dedicated logging machinery leading to step changes in productivity in the 1960’s and 1980’s, respectively. Improved logging productivity (largely through mechanization) enabled the contraction in employment while total output grew. Since the early 2000’s increased adoption of mechanization (particularly outside the U.S. South) and improved utilization allowed further growth, with productivity up 35% since the late 1990’s. Failing further technological innovations, the forest industry will be constrained by logging capacity if the logging workforce continues to shrink.