Economic Value of Wisconsin Forests

Introduction The economic health of rural Wisconsin depends on agriculture, forestry, and tourism. Forest industries and forest-based recreation, in particular, contribute significantly to Wisconsin’s economy.

Tourism Agriculture Forestry

Importance of Wisconsin’s Forest Industries  Wisconsin has been the #1 paper-making state in the nation for 50 years. The state also ranks #1 in fine papers, sanitary paper products, millwork, high quality juvenile furniture, and forest product manufacturing capital expenditures; #2 in annual payroll and total forest products employment; and #3 in hardwood veneers.

 The forest products industry is Wisconsin’s second largest manufacturing employer, providing 1 in every 6 manufacturing jobs in the state. For every job in the forest products industry, an additional 1.6 support jobs are created. Direct employment translates into 15% of total manufacturing wage and salary income generated in the state, almost $3.2 billion dollars annually.

 Including wood furniture, Wisconsin produces approximately $20 billion annually in shipments from forest products, which is 2.5 times as much as Michigan and Minnesota.  Wisconsin manufacturers depend on Wisconsin forestry. Over 90% of the state’s timber harvest is used by Wisconsin manufacturers.

Forest Industry Locations

Trends in the Forest Industries Wisconsin’s forest industries have been declining over the past few years due in part to a soft domestic economy and strong foreign competition. Figures <> show trends in the value of forest product shipments, number of companies, and employment for selected forest product industries.

Figure 4.a. Wisconsin Forest Industries – Value of Shipments

Wisconsin Forest Industries - Value of Shipments

$14 s n o i l l i $12 B

r $10 a l l o

$0 1981 1984 1985 1987 1988 1990 1991 1993 1994 1995 1996 2001 2002 Year The value of forest industry shipments leveled off after increasing steadily through the mid-1990’s. As shown in Figure 4.a. <> the value of shipments increased from $5.95 billion in 1981 to $20.32 billion in 1996, but had declined to $19.85 billion in 2002.

Figure 4.b. Wisconsin Forest Industries – Number of Companies Wisconsin Forest Industries - Number of Companies

1,500 s e i n a p m o c

f 1,000 o

r e b m u N

0 1981 1984 1985 1987 1988 1990 1991 1993 1994 1995 1996 2001 2002 Year The number of Wisconsin companies in the forest industries have also been declining over the past few years. As shown in Figure 4.b. <>, the number of companies dropped from 1,888 in 1995 to 1,847 in 2002.

Figure 4.c. Wisconsin Wood Product and Paper Manufacturing Employment

Wisconsin Wood Product & Paper Manufacturing Employment

Paper Manufacturing

s 40 d n a s

u 35 o h T

s b o J

f 25 o

e Wood Product b 20 m Manufacturing u N 15

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Year In recent years, employment in Wisconsin’s forest products industries has declined slightly. As illustrated in Figure 4.c. <>, wood product manufacturing jobs increased from 23,200 jobs in 1990 to 27,900 jobs in 1999, but decreased to 25,200 jobs in 2003. Paper manufacturing jobs increased from 49,000 jobs in 1990 to 51,100 jobs in 1998, but dramatically decreased to 44,400 jobs in 2003.

<> Wisconsin Economic Development Institute, Inc. and Center for Technology Transfer, Inc. (2004). Wisconsin’s Forest Products Industry Business Climate Status Report 2004. Madison: author.