This post, first published in 2012 has been updated with new charts over time. A full set of slides from the 2019 update are included at the bottom of this post.
This post takes a high-level look at historical trends in Oregon’s Wood Products industry in terms of employment, the industry’s share of the state economy, industry wages and the geographic distribution of industry jobs across the state. Given that there have been significant conversations in recent months regarding federal timber payments and also a possible new forest plan proposed by Oregon’s U.S. Representatives Peter DeFazio, Greg Walden and Kurt Schrader, coupled with the fact that over the past few years I have worked to piece together better historical data on Oregon’s economy, means this post is hopefully a positive and informative contribution to the ongoing discussions on the subject. There are two important items that should be noted. First, the information below refers strictly to the Wood Products industry itself and not the overall economic cluster, thus is leaves aside the impact on related industries such as pulp and paper mills (different industry codes) or transportation (log trucks). Second, this post is not about land use or land management decisions; rather it is strictly about what has happened to the Wood Products industry in Oregon. In economic jargon, this post is positive economics (“what is”) not normative economics (“what ought to be.”)
The first graph illustrates the number of employees in the state that work in the Wood Products industry since 1947. As with nearly all historical economic data the switch from Standard Industrial Classification (SIC) to North American Industry Classification System (NAICS) creates discrepancies in the data when trying to make like comparisons. The historical data, which is SIC 24 (Lumber and Wood Products) is shown in light blue while the current series for Wood Products Manufacturing (NAICS 321) is shown in dark blue. The main difference between the historical series and the current series is under NAICS, Logging employment is separated into its own category (NAICS 11331). There are also minor differences regarding some specialty flooring mills, wood cabinets and other misc manufacturing, labeled here as Adjustment. The red line in the graph is the sum of Wood Products Manufacturing, Logging and these other Adjustments. Even with these changes, there still remain some minor discrepancies in the series which cannot be easily reconciled at this time without examining individual firm data.
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While the industry is certainly highly cyclical it is interesting to note the following four items: industry employment held steady in the 70,000 – 80,000 range during the first 30 years shown on the graph, the industry took a large hit during and after the early 1980s recession, the restrictions placed on federal lands resulted in a second large hit to the industry in the early 1990s and finally, the employment in the industry has been on a steady downward trend over the past 20 years except for a couple years during the housing boom.
Year-over-year employment growth in the industry is shown below alongside Total Nonfarm Employment to illustrate the different patterns over both the business cycle and longer, structural trends. The volatility within the industry prior to the mid-1980s is evident, as is the continued job loss since then.
The industry underwent a restructuring following the 1970s boom and early 1980s recession in which industry productivity increased substantially, an industry trend that has continued to this day. As the Oregon Employment Department said in a recent article (PDF): “Technology advances, more automation, and less labor intensive manufacturing processes all conspired to reduced demand for employment, despite the ramp-up in lumber production.” These increased efficiencies (standardization of logs, mills, equipment, etc), in addition to the federal land restrictions, have contributed to the declining employment in the industry, even as value-added output has held steady. UPDATE: Thanks to the Oregon Employment Department for providing two graphs showing the productivity in the industry. Click here for a short follow-up post.
In fact, industry output, as measured by state GDP figures has remained at approximately the same level since the mid-1970s in nominal terms (with some business cycle fluctuations). However, as a share of the state’s total GDP, Wood Products has declined due to growth in all other industries (high technology in particular). The graph below shows Wood Products’ industry output as a share of total Oregon GDP through 2009 (the latest year for which industry detail data is available).
The amount of timber harvested in Oregon has risen and fallen substantially over the past 100 years as the graphs below show. Beginning in the Great Depression, the harvest quadrupled over the following 15-20 years and then held steady through the 1970s. Clearly the federal land restrictions have played an important role as the harvest on private lands has remained relatively steady, with data available from 1962. Today’s level of harvest on federal lands is is approximately 15% of the 1960s and 1970s’ level while the total amount of harvest is back to levels seen in the 1920s and 1930s.
It is this decline in harvesting of federal lands that led to the implementation of a number of different federal funding programs to assist, mostly rural, counties, in particular for schools and roads. Beginning in 1908, counties received 25% of sales of commodities produced on Forest Service lands within the county. As the harvests dropped following land restrictions, this funding source dried up. With the Secure Rural Schools and Community Self-Determination Act of 2000, the federal government increased funding for counties to make up for these lost commodity sales (portions of which must be dedicated to roads and schools). These monies were set to expire in 2006, however they were extended one year in 2007 and then extended again for four more years through FY 2011 at declining levels (this extension was incorporated into the American Recovery and Reinvestment Act).
Note: Headwaters Economics has studied county payments and land use issues extensively and Mark Haggerty has published essays on the topic in newspapers throughout the Northwest.
While local governments felt the effect of lower revenues from timber harvests, workers similarly experienced a relative decline in their wages over the past 30 years. In real terms, Wood Products employees averaged over $50,000 per year in the late 1970s, however due to slow wage growth through the late 1980s (wages growing slower than inflation), real wages fell to slightly above $40,000 per year by the early 1990s and have held steady since. For industry employees this is an end result of a number of factors at work within the industry. As mentioned previously, the industry underwent a restructuring in the early 1980s which resulted in less workers needed to produce the same output and productivity enhancements, along with automation and standardization also contributing. Another factor at work is increased competition from both within the U.S. (southeastern states) and Internationally (mainly, British Columbia, Canada). All these factors, coupled with lost jobs have resulted in average wages today that are on par with the statewide average.
Finally, the industry has a clear geographic footprint in Oregon as the following maps illustrate. Even while the number of total jobs has declined substantially in recent decades, this relative pattern remains mostly unchanged.
In summary, the Wood Products Industry in Oregon used to have 70,000+ jobs that paid 30% more than state average, however due to economic cycles, increased competition, increased productivity and decreased timber harvests on federal lands, the industry now has approximately 25,000 jobs that pay the state average. This is certainly an industry that has undergone immense change in the past 60 years and one that has importance to both our state’s past and future.
Future research is likely to incorporate more related industries, however the qualitative story will remain the same. For example, looking at Paper and Allied Products, SIC 26 (this would include pulp and paper) reveals that the industry employed 5,000 workers in the late 1940s. The industry continued to grow until the 1970s when it employed 10,000 workers in Oregon and then began a long downward trend to this day when it again employs 5,000 workers (NAICS 322). Broadening the research to include this and other support industries would strengthen the scope of the project however, hopefully, the above information provides a reasonable and approachable summary of the industry in Oregon.
Mark McMullen
Josh Lehner
Oregon Office of Economic Analysis 
[…] oregoneconomicanalysis.wordpress.com/2012/01/23/hi…ustry Share this:TwitterFacebookLike this:LikeBe the first to like this post. […]
By: Anonymous on January 23, 2012
at 12:28 PM
Nice work, Josh.
By: Michael Meyers on January 25, 2012
at 11:24 AM
The down trend is apparent. Where is the up side? Is there a growth opportunity or has it all been doomsday? I suggest some parts of the wood products industry are still vibrant and have opportunity. Too bad they get lost in the statistics. I am a small business with a unique to Oregon wood product. There is oppprtunity for me to grow. Getting broad brushed (“wood products = decline”) is not helpful.
I face the same challenge with workers compensation insurance costs. They do not differentiate between Weyerhauser and micro-business. It is a “sawmill” and that is all they need to know.
Sometimes the data set is not the answer. Your trend/graphic shows the past and not the future.
By: Kendall on January 30, 2012
at 8:53 AM
Thank you for the comment and it is good hear that there are segments of the industry doing well with an opportunity to grow. Looking at total figures for the industry does hide the fact that some firms and sub-sectors are doing better than others. In 2011, both logging and sawmills were essentially flat relative to 2010, while plywood and other wood products continued to see some job losses. Overall, our office’s forecast – based heavily on input from the Governor’s Council of Economic Advisors – sees 2010 and 2011 as the bottom in terms of the industry. We have industry employment growing by roughly 4,000 jobs over the next 4 years. That means the industry, essentially, adds back about 1/3 of the jobs lost during the recession.
By: Josh Lehner on January 30, 2012
at 7:32 PM
[…] Parts of rural Oregon are dying economically, because Bill Clinton, bowing to green extremists, put the interests of spotted owls ahead of the interests of American timber workers — even though we now know that spotted owls are suffering at the hands of a rival owl species, not timber operators. Here’s a chart that illustrates the spotted owl casualty count. (And much more can be learned about Oregon’s Spotted Owl Recession here.) […]
By: Let Them Eat Owls? « Monkey Wrenching America on February 6, 2012
at 8:08 AM
[…] in Oregon, once home to a thriving wood products industry, we’re now paid by the feds not to log. In 1994, the NW Forest Plan was implemented to protect […]
By: Boom or Bust? States Have A Choice « Monkey Wrenching America on February 10, 2012
at 2:15 PM
[…] kept up with inflation, according to a report from the Oregon Office of Economic Analysis […]
By: Oregon loggers endure, enjoy 'worst job in America' on May 1, 2012
at 6:28 PM
[…] the industry declines over time so too does the industry’s influence on the index. [See this previous post for a historical look at the Wood Products industry in […]
By: Oregon Manufacturing Index « Oregon Office of Economic Analysis on September 21, 2012
at 11:17 AM
[…] lumber and related industries made up more than 10% of Oregon’s economy; there were over 70,000 well-paying jobs, and families could have a good life with a single wage earner. When I was a kid you could earn […]
By: Rural Industrial Property in Lane County « Eugene Oregon Real Estate Blog by Craig Tomlinson on January 22, 2013
at 3:28 PM
[…] rate crested at 12.1 percent and the timber industry was hit hard, back when there were around 80,000 direct wood products manufacturing jobs, and the whole industry underwent a major […]
By: Not To Be Too Deflating, But… | Oregon Office of Economic Analysis on March 15, 2013
at 10:04 AM
[…] the mills and loggers. For a more thorough look at the industry changes please refer to this previous post on the industry’s history or this recent Oregonian article. I will highlight just a couple items. First, the industry used to […]
By: Timber Counties | Oregon Office of Economic Analysis on May 28, 2013
at 1:45 PM
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By: How To Get Money Fast on June 4, 2013
at 1:45 PM
[…] from a geographical perspective within the state. The decline of the timber-related jobs, as detailed in-depth previously, is concentrated in the state’s Southern and South Coast counties, while the Computer and […]
By: Back in the Office and Upcoming | Oregon Office of Economic Analysis on July 9, 2013
at 9:01 AM
[…] this carries personal relevance. I grew up in the Pacific Northwest and watched the region’s lumber industry collapse during the 1980s, due in good part to unsustainable practices. That happened barely 100 years after […]
By: Governing the Commons: learning from enduring institutions | Marketing The Social Good on October 17, 2013
at 8:37 PM
[…] changed over the past 40 years. Previously our office has detailed historical trends in both the wood products industry and the high-technology industry. What follows below the fold is a short summary from our latest […]
By: Changing of the Guard | Oregon Office of Economic Analysis on September 4, 2014
at 10:47 AM
[…] makers, textiles and the like. Of course wood products and paper mills would be here as well, which have not fared well over the past 30 years. The reason Oregon outperforms is that a large amount of our manufacturing can be considered […]
By: The Manufacturing Renaissance in Perspective | Oregon Office of Economic Analysis on January 23, 2015
at 10:20 AM
[…] rates were strong for a few years, even if not all the jobs were fully regained in the mills (see here for a longer historical perspective on the wood products industry.) Given that the U.S. economy more broadly has not exhibited the strong, cyclical rebound in each […]
By: Job Growth Across Oregon | Oregon Office of Economic Analysis on April 2, 2015
at 10:25 AM
[…] and labor market. These are easiest to see in the manufacturing and goods producing industries (timber/forest sector) of course as the economy has and is transitioning more and more to services. Additionally, see […]
By: Job Growth Quality, Oregon Edition | Oregon Office of Economic Analysis on April 23, 2015
at 10:33 AM
[…] In terms of the economic hit the Timber Belt experienced, it started with the early 1980s recession. At that time many of the mills in the region were at the end of their life cycle. The severe recession with sky high interest rates hurt the demand of new construction and wood products more broadly. As the recovery took hold, industry consolidation occurred and some mills retooled with new investment, however not all did. Furthermore, the wood products market had increased competition with lumber from British Columbia and U.S. southern pine. All told, the industry output recovered but not all the jobs returned. All of this was largely before the environmental restrictions which have seen the numbers fall significantly further. See here for more on the history of wood products in Oregon. […]
By: The Timber Belt | Oregon Office of Economic Analysis on April 28, 2015
at 9:27 AM
The unfortunate fact is that we have more timber growing today in federal forests than we did in the mid 70s. On the O & C lands, there were approx 40 billion board feet growing at the time of the passage of the O & C act of 1937. From the figures given at the time of the WOPR (BLMs Western Oregon Plan Revision that was withdrawn about 4 years ago) the estimated volume on those same lands was over 70 billion board feet. The natural resource is still there and but for lack of management, and I’m not suggesting “CLEARCUTTING the last of the Ancient Forests” ….but good sound forest management through judicious thinning and replanting, it will be there forever.
Job increases and healthier communities still exist as a potential. If we don’t use it, we’ll lose it, along with clean water, habitat and all the things we love about our forests.
Reminds me of the old indian with the tear in his eye……
By: David on April 29, 2015
at 8:02 AM
Thanks David. I think many share that sentiment in general. They (Feds, State and the various interested parties) have been working on a plan, e.g. the Wyden bill for lack of a better description. We shall see if it comes to pass. The recent agreement, news and even job numbers coming from John Day and Grant County are encouraging.
By: Josh Lehner on April 29, 2015
at 9:01 AM
[…] issues going on, like the national downturn, flow of migrants, being a part of the Timber Belt and its longer run trends, possibly major employers cutting back and the like. However, here we see a regional economy suffer […]
By: Drought, Risk to the Outlook | Oregon Office of Economic Analysis on May 26, 2015
at 1:23 PM
[…] [9] https://oregoneconomicanalysis.com/2012/01/23/historical-look-at-oregons-wood-product-industry/ […]
By: The Structure of The Oregon Legislature and The Constituency It Serves | Oregon Legislative Guide on June 2, 2015
at 3:20 PM
On page 4 of the pdf chart download it says that industry output has remained steady since the 1970’s. On page 5 of the pdf download the chart shows that harvests have decreased about 3-fold since the 1970’s. The fall in fraction of GDP almost tracks the decline in production as does the employee count. The data actually presented suggests that reduction in timber harvest is responsible for most of the reduction in employment and percentage of GDP. Looks like some false advertising going on here.
By: Tom on August 23, 2015
at 8:20 PM
Hi Tom,
Thanks for the comment. You’re right, that can be a bit confusing. There are a few things going on. First, the industry’s output has been fairly steady for a few decades now in dollar terms (essentially harvest amount times log prices that turns into final lumber prices). So even as harvest levels have fallen considerably, the dollar value of output has fallen less due to higher prices. Prices were particularly high in the late 80s and early 90s, right as the big restrictions were put into place that lowered supply. Prices have come down since then, partly due to the rise of southern pine, British Columbia products etc.
Second, while the industry has been fairly steady in output, the rest of the economy has grown considerably. So as a share of the total, the timber industry has declined a lot.
Third, while harvest levels and mill activity certainly have an impact on employment, they’re not the only factor here. Mills today are much more efficient than in generations past. Same is true in a lot of other industries. We can produce a whole lot more stuff these days with fewer workers. Along these lines, even if we went back to 1970s harvest levels, we wouldn’t have 1970s employment levels.
Best,
Josh
By: Josh Lehner on August 23, 2015
at 9:18 PM
[…] following the early 80s recession and timber industry restructuring. [See here for more on the timber industry’s history in Oregon, also a topic discussed on OPB.] Migration and population growth returned in full force […]
By: Population and Housing, Some History | Oregon Office of Economic Analysis on September 16, 2015
at 9:37 AM
[…] issues going on, like the national downturn, flow of migrants, being a part of the Timber Belt and its longer run trends, possibly major employers cutting back and the like. However, here we see a regional economy suffer […]
By: Drought & Oregon economy | Oregon Tax News on September 19, 2015
at 1:58 PM
[…] it once was. The state’s annual timber harvest is about half what it was 30 years ago, and employment in the wood products industry has fallen by a similar amount. With dozens of mills closed, many of those jobs wouldn’t come […]
By: Can advanced wood products lift rural Oregon?: Editorial Agenda 2015 - OregonLive.com - Portland Daze on September 19, 2015
at 4:01 PM
[…] and labor market. These are easiest to see in the manufacturing and goods producing industries (timber/forest sector) of course as the economy has and is transitioning more and more to services. Additionally, see […]
By: Job growth quality | Oregon Tax News on September 21, 2015
at 7:18 AM
[…] our job polarization work in recent years. However the first place it was really evident was in our historical look at wood products in Oregon, where the industry has seen both large levels of job losses in the past 30+ years and real wage […]
By: Manufacturing Wages (Graph of the Week) | Oregon Office of Economic Analysis on November 3, 2015
at 9:11 AM
[…] While much of the recent focus is on farming and grazing, one big issue facing Oregon, particularly the southern and eastern parts of the state, is the decline of the timber industry. It started with the early 80s recession and accelerated following the environmental restrictions put in place a decade later. (See here for more on the industry’s history.) […]
By: Harney County, A Brief Historical Perspective | Oregon Office of Economic Analysis on January 6, 2016
at 1:33 PM
[…] the issue is that of stagnant or declining wages for the jobs that do remain or are created. Wood products or the forest sector more broadly used to pay a 30-35% wage premium relative to the average industry. However, after adjusting for […]
By: Economic Anxiety in Oregon, A Summary | Oregon Office of Economic Analysis on November 9, 2016
at 1:14 PM
[…] impacts middle-wage jobs considerably. See here for our historical look at the wood products industry in Oregon. Also here to see how automation and technological change impacts women in middle-wage jobs just as […]
By: City Club of Portland (Video and Research Links) | Oregon Office of Economic Analysis on January 10, 2017
at 1:40 PM
[…] 1990s were different and in a very good way for the economy (outside of the forest sector). Nominal wage gains were nearly 4.5% per year, significantly outpacing inflation. As such real […]
By: Oregon Wages, 1980-2016 | Oregon Office of Economic Analysis on January 23, 2017
at 10:06 AM
[…] be found at: Oregon Office of Economic Analysis. Wood Products Productivity, an Update. Analysis of Oregon’s wood products industry also showed that while wages in wood products industry used to be 30 percent higher than state […]
By: The Changing Role of Manufacturing in the U.S. and Insights for the Rural West - Headwaters Economics on February 17, 2017
at 8:40 AM
[…] them. I was brought in to provide a summary and outlook of the timber industry, largely based on our office’s 2012 report. I argue that report is one of the most informative pieces our office has done. It also continues […]
By: Oregon’s Timber History, An Update | Oregon Office of Economic Analysis | eClips on October 11, 2017
at 11:49 PM
[…] them. I was brought in to provide a summary and outlook of the timber industry, largely based on our office’s 2012 report. I argue that report is one of the most informative pieces our office has done. It also continues […]
By: Oregon’s Timber History, An Update | Oregon Office of Economic Analysis on October 15, 2017
at 7:23 AM
It would be interesting to see a chart side by side of acual logging vs amount of timber in board ft burned, year over year since about 1985 to the present.
We are relocating to escape the smoke that continues to grow worse every year, as logging continues to shrink. We are burning our forests instead of harvesting them. Losing habitat by the sq miles every year. Oregon is a messed up state and the people running it seem to not give a damn. Everybody complains about the fires until the rain starts every year then repeat. Definition of insanity is what I see with no possitive change in sight.
By: Jon Ziegler on December 12, 2017
at 6:37 PM
Hi Jon,
Thanks for the comment and thoughts. You do bring up a good point and one I know is discussed at times. I don’t have total burned acreage in Oregon, but I do have fires on state lands. See the chart in the link below. One issue here is where is the fire? Is it on federal land, state land, or private land? Ownership matters in terms of who pays for the damages, but not in the broader point you raise.
For the record, I did go back and update a number of the timber history pieces/work and posted that a couple months ago.
Best,
Josh
By: Josh Lehner on December 13, 2017
at 9:22 AM
[…] forced upzone was timed perfectly. When it happened, the state’s economy was cratering amid rapid decline in the wood industry; most Oregonians probably feared long-term disinvestment more than overinvestment. But that upzone […]
By: Could State-Led Upzones Happen Here? 7 Lessons from Modern Cascadia - Sightline Institute on November 2, 2018
at 12:35 PM
[…] more diversified and more like the U.S. if it loses its specialty industries — think of the timber decline here in Oregon. Today we are more like the U.S. mostly due to growing jobs in other sectors, but also in part due […]
By: Industrial Diversification in Oregon | Oregon Office of Economic Analysis on March 13, 2019
at 10:01 AM
[…] even as they are more boom and bust over the business cycle. On the other hand, subsectors like wood products and transportation equipment we are not gaining market share. Being red in the chart above is not a […]
By: Regional Business Cycle Exposure, Pt 1 | Oregon Office of Economic Analysis on March 14, 2019
at 8:58 AM
[…] compared to the nation, it used to be 20x the concentration a generation or two ago. As such, the decline of the timber industry and job polarization overall have made Oregon and Lane County’s economy more like the […]
By: Eugene-Springfield Economic and Housing Outlook | Oregon Office of Economic Analysis on June 4, 2019
at 8:47 AM
[…] historical changes and the outlook. As such, I have fully updated and expanded our office’s Historical Look at Oregon’s Wood Products Industry which we originally published in 2012 and last updated a couple years ago. See those posts for a […]
By: What Replaces Timber? | Oregon Office of Economic Analysis on July 25, 2019
at 9:32 AM
[…] historical changes and the outlook. As such, I have fully updated and expanded our office’s Historical Look at Oregon’s Wood Products Industry which we originally published in 2012 and last updated a couple years ago. See those posts for a […]
By: What Replaces Timber? | eClips on July 25, 2019
at 9:50 AM