The document provides a historical overview of Oregon's wood products industry, highlighting employment trends, economic impacts, and changes in timber harvest practices since the 1970s. It notes a significant decline in jobs and industry wages, along with increased competition from international markets, particularly China. The report concludes with a comparison of the timber industry's challenges to other declining sectors in the U.S., emphasizing the ongoing shifts in economic performance and quality of life in Oregon's timber belt.

1. Historical Look at Oregon’s
Wood Products Industry
September 2017
Oregon Office of Economic Analysis

2. Oregon Office of
Economic Analysis
2
Historical Employment
• SIC to NAICS conversion
results in historical data
breaks
Industry Impacted By:
• Early 1980s recession
• Federal Land Restrictions
• Productivity and
efficiency increases
• Increased competition
(Southeastern states,
British Columbia)

3. Oregon Office of
Economic Analysis
3
Oregon Wood Products Employment
Data Not Perfectly Compatible: 1978 Lumber and Wood Products (SIC 24), 2015 Wood Products + Logging (NAICS 321, 113)
Source: Oregon Employment Department, Oregon Office of Economic Analysis
1978: 81,400
500 - 1,000
> 5,000
3 – 5,000
1 - 3,000
200 - 500
< 200
No Data
2016: 29,000
Number of Jobs
County Employment

4. Oregon Office of
Economic Analysis
4
Oregon Wood Products Employment
Share of All Private Sector Jobs
Data Not Perfectly Compatible: 1978 Lumber and Wood Products (SIC 24), 2015 Wood Products + Logging (NAICS 321, 113)
Source: Oregon Employment Department, Oregon Office of Economic Analysis
1978: 10.2%
> 33%
20 – 33%
10 – 20%
2 – 10%
< 2%
No Data
2016: 1.9%
Share of County Employment

5. Oregon Office of
Economic Analysis
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Share of State GDP
• Industry output
has actually held
steady since mid-
1970s
• However, other
Oregon industries
(especially high
tech) have grown
substantially
• Thus, Wood
Products’ share of
state GDP
continues to
decline

6. Oregon Office of
Economic Analysis
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Harvest: Back to the Future
• Timber harvest
increased
substantially
beginning during
the Great
Depression
• Harvest levels held
steady through
the mid-70s
• Following federal
restrictions,
harvest declined
dramatically in the
1990s

7. Oregon Office of
Economic Analysis
7
Changes in Harvest
• Biggest change in
Oregon’s timber harvest
has been the decreased
logging on federal
lands, particularly since
the late 1980s
• Private land harvests
have fallen some over
time
• Harvests on state and
local lands has
increased in recent
decades, but remain a
small portion of the
market

8. 8
Federal Payments to Counties Decline
• Since 1908
counties
received 25% of
sales
• Secure Rural
Schools and
Community Self-
Determination
Act of 2000
• Continued for 4
years at
declining levels,
included in
ARRA
Oregon Office of Economic Analysis
$0
$100
$200
$300
$400
$500
1986 1990 1994 1998 2002 2006 2010
Millions
Fiscal Year
Timber Payments
OWL
25% Fund (FS)
Secure Rural Schools
Mineral
BLM
PILT
Chart not updated

9. Oregon Office of
Economic Analysis
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Flat Wages, Falling Premium
• Timber-related jobs
used to be great,
paying a 30%+
premium compared to
the average industry
• Total industry wages
accounted for 13% of
statewide wages,
approx. the same as
High-Tech today
• Automation and
industry decline led to
stagnant wages
• Industry jobs today
are middle-wage, not
low-wage, but no
wage premium
remains relative to
statewide average

10. Oregon Office of
Economic Analysis
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Increased Competition for
Scarce Supply of Logs
• Chinese demand
for NW logs didn’t
really used to exist
• Following recession
and Russian tariffs,
Chinese sought out
other log sources
• Impact raises log
prices (good for
landowners, bad for
mills facing weak
domestic housing
demand for
finished goods)
• Chinese demand
has ebbed some,
but remains
• Of course, would
love to export
finished lumber,
not raw logs

11. Oregon Office of
Economic Analysis
11
• In recent years, Pacific Northwest mill margins under pressure
from both sides. High log prices due to low harvest levels and
increased competition from China for raw logs. Weak domestic
demand and increased Canadian exports hold down final
prices.
• Under either a tariff or another softwood lumber agreement, it
should help Pacific Northwest mills with pricing power
• Better margins for mills, supporting their operation, but also higher
consumer prices
• Some of this pricing power will flow to land owners. At higher
lumber prices, mills can afford to pay more for logs, thus raising
or at least supporting log prices too.
• Higher log prices should result in higher private land harvest
levels. Unclear how much. Economic impact likely smallish.
• The tariff (if it sticks) or a SLA may help Northwest mills some,
but it cannot solve their biggest obstacle: raw logs
Canadian Tariff

12. Oregon Office of
Economic Analysis
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•During the 1940s-1970s the industry
employed 70,000+ workers and paid 30%
above the state average
•Events with significant impact:
•Early 1980s recession, industry restructuring,
Federal Land restrictions, increased
competition from Southeastern U.S. and
British Columbia, increased productivity and
mechanization
•Today there are about 30,000 jobs that pay
the state average
Conclusion

13. Oregon Office of
Economic Analysis
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Finally, Quality of Life vs
Economic Performance
• The Timber Belt
suffered
economic shock
as bad as the
Rust Belt, the
Corn Belt or old
textile mills
across the South
• As jobs
disappeared,
people moved
away from those
other locations
• In the Timber
Belt, people kept
moving in
For more: https://oregoneconomicanalysis.com/2015/04/28/the-timber-belt/

14. Oregon Office of
Economic Analysis
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joshua.lehner@oregon.gov
(503) 378-4052
www.OregonEconomicAnalysis.com
@OR_EconAnalysis
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