FOREST INDUSTRY BRIEF NO. 9

ALASKA’S FOREST PRODUCTS INDUSTRY AND TIMBERHARVEST
PART 3: SALES, EMPLOYMENT AND CONTRIBUTION TO THE STATE’S ECONOMYBY KATE C. MARCILLE, CHELSEA P. MCIVER, ERIK C. BERG, TODD A. MORGAN AND GLENN A. CHRISTENSEN

INTRODUCTION

This Forest Industry Brief is part of a series of reports
presenting findings from a Bureau of Business and Economic
Research (BBER) census of Alaska’s primary forest products
industry. Part 3 of this series presents information on sales
value and employment associated with primary wood products
manufacturing, the economic contribution of forest products
manufacturing in the state and an analysis of the changes in the
broader forest industry over time. All dollar figures included
have been adjusted for inflation to constant 2015 dollars, unlessotherwise noted.
ALASKA’S PRIMARY PRODUCT SALES VALUE
AND MARKETSThe 2015 mill census identified 60 active primary forest
products manufacturers in Alaska, producing an array of
products including lumber and other sawn products, houselogs, firewood, tonewood (wood for making musical instruments), cedar products and wood pellets. Alaska’s forest
industry reported an estimated total sales value of primarywood products, log exports and residues of more than $114
million, free on board (f.o.b.) the producing mill (Table 1).
This represented a 19 percent decrease from the $141 million
in sales reported in 2011 (Berg et al. 2014). A similar decline

in sales value was observed from 2005 to 2011 and the total
sales value in 2015 was approximately 35 percent lower thanin 2005 (Halbrook et al. 2009).
Excluding residues and log exports, the sales value generated
as a result of primary wood products manufacturing exceeded$23 million during 2015. In contrast to the overall decline intotal forest industry sales value, sales by Alaskan manufacturers
increased approximately 28 percent over 2011 primary productsales. The majority (66 percent) of wood products manufactured within Alaska were sold within the state, a proportional
decrease relative to in-state sales during 2011 (73 percent).
Lumber and other sawn products accounted for more than half
(52 percent) of total primary product sales. Approximately 49
percent of all lumber produced in Alaska was sold within thestate, down from 56 percent in 2011, while sales of lumber
to other states accounted for 39 percent, up from 33 percent.
Finished lumber products sent to other countries declined
between 2011 and 2015, from nearly 11 percent to 8 percent.
In 2015, a majority (86 percent) of the primary products
other than lumber manufactured in Alaska were sold within
the state. This represented a decrease from the proportion ofother products – house logs, firewood, cedar products andtonewood – sold in-state during 2011 (nearly 92 percent).
In 2015, out-of-state markets accounted for an increasing

Table 1. Destination and sales value of Alaska’s primary wood products, residue and exports, free on board (f.o.b.) the producing
facility in 2015.
AlaskaProduct

West Coast

Other states

Pacific Rim

Canada2015 total------- Thousands of 2015 dollars -----Lumber

5,897

Other

b

Total primary product*

4,708

633

891

12,167

9,531

723

454

250

190

11,147

15,427

5,431

1,087

1,141

228

23,314

Residuesc

4,886eSawlog and pulpwood exportsd

86,207e2015 total sales value*

114,4072011 total sales valuef

141,158

2005 total sales value

177,278gª West Coast states include California, Hawaii, Oregon and Washington.					bOther products include house logs, firewood, wood pellets, cedar products and tonewood.			
cResidue products include firewood, garden mulch, animal bedding and wood chips for park/playground fill and landscaping.
dUnited States International Trade Commission (USITC) DataWeb tool.
eData pooled across destinations to prevent disclosure of confidential information.

proportion of other product sales. Within the “other” productcategory, cedar and tonewood products accounted for the
majority of out-of-state and international sales. Manufactured
house log and log home products accounted for approximately$5.5 million of in-state sales.
While some of the residues generated from the manufacturingof primary wood products in 2015 remained unused, over 31
thousand bone dry units (BDU)1 were repurposed and sold in
the form of firewood, garden mulch, animal bedding and woodchips used for playground fill and landscaping. Estimated sales
generated from residues dramatically increased from 2011 ($1.2
million) to 2015 ($4.9 million). Approximately 40 percent ofutilized residues were coarse residue – including chips, edgings,
slabs, cull sections of logs and log ends – sold as pulp chips toout-of-state markets.
Exports of sawlogs and chipped roundwood eclipsed all othersales during 2015. As mentioned in Part 1 and 2 of this series,
the vast majority of timber harvested in Alaska is exported.
Log and chip exports accounted for 75 percent ($86 million)of Alaska’s total wood products sales value in 2015. This represented a decrease from the 2011 estimated export sales valueof $121 million (29 percent). During 2011 and 2015, the vast
majority of log exports were shipped to Pacific Rim countries,
predominantly China (USITC 2016) (Figure 1). The decreasein exported log volume, as well as shifts in global log markets,

138

One bone-dry unit (BDU) equals 2,400 pounds of oven dry wood.

2

Berg et al. 2014.
Halbrook et al. 2009.
* Totals may not sum due to rounding.
fgresulted in an overall decrease in total sales value across Alaska’sforest products industry from 2011 to 2015. While the value oflog exports to China increased approximately 6 percent from2011 to 2015, exports to Japan fell 50 percent and exports to
Korea decreased by 69 percent. However, over the same period,
Alaskan mills were able to increase lumber production andassociated sales value (Table 1), indicating some flexibility toshift away from unfavorable international log export markets
to domestic production.
While overall log export value decreased, the average value($/MBF) of log exports to all countries increased from 2011
to 2015 with the exception of Canada. Similarly, the combined
average value across all export species increased from $673/
MBF in 2011 to $851/MBF in 2015. Sitka spruce accounted
for 74 percent of log export sales in 2015, while western red
cedar had the highest average value at more than $1,400/MBF.
Between 2011 and 2015, several shifts were observed across
Alaskan log export species composition and destination country(Table 2). From 2011 to 2015 average price increased for Sitka
spruce and western red cedar, while western hemlock saw
a slight decrease. Alaskan log exports to Korea fell in 2015,
predominantly in spruce (100 percent) and western hemlock(65 percent). However, the proportion of exported red cedar
logs destined for Korea increased 20 percent from 2011 to2015. Similarly, while Japan received a smaller proportion of

300

300

250

250

200

200

150

150

100

100

50

50

Million board feet Scribner (MMBF)

Millions of dollars ($)

Figure 1. Total value of Alaska
log exports (inflation-adjusted
2015 millions of dollars) by destination country and total export
volume (MMBF), 2000 to 2015
(USITC 2016). Volumes from
USITC converted using 7.0 m3/
MBF (Daniels et al. in prep).

0

0
2000

2001

Others

2002

2003

2004

Canadaexported spruce and hemlock logs, western red cedar exports
proportionally increased 12 percent. Conversely, China received
a higher proportion of both spruce (27 percent increase) andhemlock (28 percent increase) in 2015, while receiving no red
cedar log exports in 2015. Shifts in global log export markets
and changes in demand by destination and species continue
to influence the log export sector of Alaska’s forest industry.
ALASKA’S FOREST INDUSTRY EMPLOYMENTAND LABOR INCOME

The primary forest products manufacturers characterizedin BBER’s periodic census are just one component of thebroader forest industry in Alaska. The classification of theforest industry sectors used here follows the North American
Industry Classification System (NAICS) available online via the
U.S. Department of Commerce Bureau of Economic Analysis(BEA) website2. Alaska’s forest industry can be described using
three categories: NAICS 113 – forestry and logging; NAICS
321 – wood products manufacturing; and NAICS 322 – paper
manufacturing.
These categories include employees who work in both theprimary and secondary wood products and paper manufacturingsectors. It should be noted that these NAICS categories likely

2005

2006

Korea

2007

2008

Japan

2009

2010

China

2011

2012

2013

2014

2015

Export volume (MMBF)

underestimate total employment in the forest industry because
they do not include log hauling (trucking) companies, lumber
and construction material wholesalers, road construction
and maintenance contractors, forest management services
performed by government agencies or nonprofit organizations. These publicly available data provide another point ofcomparison for estimates of employees and labor income forthe primary forest products manufacturers to compare with
BBER survey data, as well as additional information on thelarger forest industry.
Alaskan forest industry employment trends have generally
paralleled changes in timber harvest volume through time
(Berg et al. 2014; Halbrook et al. 2009). Both timber harvestand employment in the forest industry peaked in 1989 and1990 with more than 4,200 workers (Halbrook et al. 2009).
The once robust pulp and paper sector in Alaska experienced
a dramatic drop in employment with the closure of the final
pulp mills in the late 1990s (Berg et al. 2014; Halbrook et al.
2009) and employment in the pulp and paper industry has
since ceased. Forestry and logging employment experienced
a decline in the early 2000s in response to the termination of
the U.S. Forest Service’s Southeast Alaska 50-year timber sale
contracts (Alexander 2012; Berg et al. 2014). During 2005,
approximately 1,451 workers were employed across the forest

2
For this report, BEA estimates from 1990 to 1998 were based on previously published data (Berg et al. 2014; Halbrook et al. 2009) to bridge the shift fromStandard Industrial Classification (SIC) Codes to North American Industry Classification (NAICS) Codes. From 1998 through 2015, the most recent BEA
data were used (USDC BEA 2016).

3

Table 2. Proportion of Alaska log exports by species and destination country in 2011 and 2015a.
Sitka spruce

Western hemlock

Western red cedarCountry

2011

2015

2011

2015

2011

2015

China

57%

84%

42%

70%

13%

0%

Japan

23%

16%

23%

11%

39%

51%

Korea

20%

0%

35%

19%

28%

48%

Canada

0%

0%

0%

0%

20%

1%

601.58826.67829.05820.57

1,294.45

1,464.36

Avg price ($/MBF)bª Source: USITC (2016)b
USITC export volumes were converted using a derived factor of 7.0 m3/MBF.

industry (wood products manufacturing, forestry and logging)exhibiting an increase over previous years in response to the
housing boom of 2004 and 2005 (Berg et al. 2014). However,by 2011 combined employment in wood products manufacturing, forestry and logging had fallen approximately 30
percent to 1,015 workers. Employment in the forest industry
increased in the years following 2011 reaching 1,252 workers
in 2014 (Figure 2).
In 2015, total employment in the combined sectors of wood
products manufacturing, forestry and logging was an estimated1,213 full- and part-time workers (Figure 2) (USDC BEA
2016). Of these, approximately 702 workers (58 percent)were employed in the wood products manufacturing sector.
In addition, we estimate that 511 workers were employed inforestry and logging during 2015.
In addition to the previously mentioned industrial sectors,
NAICS 1153 – Agricultural and forestry support activity is also
a component of the forest industry. Support activities have notbeen included in previous BBER Alaska industry reports and
BEA data were not sufficient to generate reasonable estimatesfor forestry support employment in Alaska throughout theentire time series shown in Figure 2. In 2011, an estimated
263 workers were employed in support activities for forestry3 –increasing the estimate for total forest industry employment toapproximately 1,278 workers. By 2015, employees engaged insupport activities for forestry increased to 367 workers bringing
the total forest industry employment for 2015 to 1,580 workers.
Workers in the forest industry earned $111 million in labor
income or worker earnings during 2015 (USDC BEA 2016).
Labor income includes wages and salaries, some benefits andearnings of the self-employed. Employees in forestry and logging
earned approximately $64 million while workers in the wood

products manufacturing sector earned $42 million. Employees insupport activities for forestry earned approximately $5.5 million
during 2015. Since 2005, inflation-adjusted earnings across all
sectors have increased with earnings in the forestry and logging
sector approximately 38 percent higher in 2015. Wood products
manufacturing earnings increased nearly 150 percent between
2005 and 2015. This trend of increasing earnings may indicatethat existing workers in the forest industry are working moredays out of the year in 2015 relative to 2005, perhaps in parallel
to increased lumber production in the state. The average wood
products manufacturing employee earned $60,055 in 2015.
ECONOMIC CONTRIBUTION OF ALASKA’S
WOOD PRODUCTS MANUFACTURING TO STATEECONOMY

Economic contribution analyses measure gross changes
in economic activity that can be associated with an industry,
event or policy on an existing regional economy (Watson et al.
2007). Measuring the economic contribution of Alaska’s forest
industry captures the direct economic activity associated with
the industry, as well as economic activity generated throughout
the state economy by the existence of the forest products
industry (Crandall et al. 2017). For this report, we assess thecontribution of Alaska’s forest industry as dollars spent onintermediate inputs, taxes, labor and households, generating
economic opportunities as additional spending cycles throughthe state’s economy.
Wood products manufacturers, workers engaged in forestry
support activities and those employed in forestry and logging
collectively, contributed 1,580 jobs and nearly $111 million
dollars in labor income directly to the state economy in 2015.

3
Support activities for forestry (NAICS 1153) encompasses a variety of activities including wildfire suppression and prevention activities, tree thinning andplanting, and pest management.

4

Figure 2. Employment in Alaska’s forest
industry, 1990-2015 (USDC BEA 2016;
BBER 2016).

4500
4000

Number of workers

3500
3000
2500
2000
1500
1000
500

Forestry and logging

The activity associated with this direct employment generates
additional economic opportunities by relying upon otherindustries for raw and intermediate inputs and services, thus
indirectly bolstering employment and wages in various othersectors. Using regional data and existing linkages within Alaska’s
economy represented by the Bureau of Economic Analysis’ (BEA)
RIMS II multipliers4 (USDC BEA 2014), BBER estimates thatthe wood products manufacturing sector alone supported over
1,500 full- and part-time jobs and an associated $118 million
dollars in labor income during 2015 (Table 3). Thus, for every
wood products manufacturing job in the state another 1.2 jobs
are supported in related sectors. Additionally, for every $1
dollar paid in labor income by wood products manufacturers
another $1.81 is paid in supporting sectors, including forestry
and logging, forestry support, trucking, wholesale trade andmanagement.
Additionally, BBER estimates that the 511 people employedin the forestry and logging sector during 2015 supported an
additional 541 full- and part-time jobs along with $43.5 million
dollars in labor income in supporting sectors, such as equipment
sales and repair. It should be noted that we do not aggregate
sectors and avoid providing estimates of the total employment
and labor income contribution for the entire forest industry
to avoid double counting since some employment and labor
income shows up as both direct contributions to their sector, as
well as indirect contributions to other sectors. In other words,
some or all of the direct employment and labor income in the

4

Wood product manufacturing

Pulp

2015

2014

2013

2011

2012

2009

2010

2007

2008

2006

2005

2004

2003

2001

2002

2000

1999

1998

1996

1997

1995

1994

1993

1991

1992

1990

0

Total forest industry employment

forestry and logging sector would be included with the indirect
and induced contributions from wood products manufacturing
since these manufacturers rely upon forestry and logging businessto supply their raw material inputs.
ABOUT THE DATAThis survey effort is the third application of its kind in Alaska(Halbrook et al. 2009; Berg et al. 2014) and presents informationcollected from a BBER census of primary manufacturers in thestate that receive timber harvested in Alaska. Primary forest
product manufacturers are firms that process timber into
products such as lumber, as well as facilities like wood pellet
plants that use the wood fiber directly from timber processors.
Through a written questionnaire, phone or in-person interview,
timber-processing and residue-utilizing facilities provided
information about their 2015 operations including:• Plant location, production capacity and employment.
• Volume of raw material received, by county and ownership
origin.
• Species of timber volume received and corresponding live/
dead proportions.
• Finished product volumes, types, sales value and market
locations.
• Volume, utilization and marketing of manufacturing residue.

The Bureau of Economic Analysis does not endorse any resulting estimates and/or conclusions about the contribution of a given sector on an area.
5

Table 3. Average annual employment and labor income contributions from Alaska’s forest industry.

SectorDirectemployment

Indirect andinducedemployment

Total
employment
contributiona

Indirect andinduced labor
incomeDirect labor
incomeTotal labor
incomecontributiona---------- Thousand 2015 dollars ---------

Wood products manufacturing

702

851

1,553

$

42,159$76,316$

118,475

Forestry and logging

511

541

1,052

$

63,756$

43,526$107,282

Forestry support activities

367

69

436

$

5,528

$

1,871

$

7,399

a

a

$

111,443

Total forest industry

1,580

a

a

ª Indirect and induced employment and labor income should not be summed for multiple sectors due to some employment and income showing up as both direct contributions to their sector and indirect contributions to other sectors.

In the event of nonresponse from a facility, data collected inprevious surveys were updated using current data collected forfacilities of a similar size, product type and location, as well as
information on market trends and prices. For the 2015 Alaskan
mill census, data were received for 51 of the 60 active, in-state
facilities accounting for 85 percent of primary manufacturers.
While some facility data was estimated, 80 percent of the 2015
harvest volume data was captured through direct census of
manufacturers or published information. Unlike other westernstates (ODF 2015, WA-DNR 2015), no single state agency
compiles and comprehensively reports statewide timber harvest
statistics for Alaska. For this report, timber harvest estimates
were based on several sources including: BBER mill census
data collected from primary processors, USDA Forest Service
Cut and Sold Reports, Timber Supply and Demand (706a)reports to Congress under The Alaska National Interest Lands
Conservation Act (ANILCA) (Alexander 2012), State of Alaska
Division of Forestry personal correspondence, as well as tradeand export data compiled from the United Sates International
Trade Commission (USITC).
The University of Montana’s Bureau of Business and Economic
Research (BBER) and the USDA Forest Service’s Forest
Inventory and Analysis (FIA) Program at the Pacific Northwest
Research Station (Portland, Oregon) cooperated in the analysis
and preparation of this report. With the FIA programs at the
Pacific Northwest and Rocky Mountain Research Stations,
BBER has developed the Forest Industries Data Collection
System (FIDACS) to collect, compile and make available
state and county information on the operations of the forest
products industry. Information collected from manufacturers
is stored at the BBER. Additional information not presented
here, including the full set of data tables, is available on the
BBER website at www.bber.umt.edu/FIR/S_AK.asp or uponrequest. However, individual firm-level data are confidential
and will not be released.
6

See also, Part 1: Timber Harvest, Products and Flow (BBERFIB-7), Part 2: Industry Sectors, Capacity and Outputs(BBER-FIB-8); and Alaska 2015 Data Tables and Figures.
REFERENCES

Alexander, S.J. 2012. Timber Supply and Demand: 2011. Alaska
National Interest Lands Conservation Act Section 706 (a) reportto Congress. Report no. 27. Anchorage, AK: U.S. Departmentof Agriculture, Forest Service, Alaska Region.
Berg, E.C.; Gale, C.B.; Morgan, T.A.; Brackley, A.M.; Keegan,
C.E., III; Alexander, S.J.; Christensen, G.A.; McIver, C.P.;
Scudder, M.G. 2014. Alaska’s Timber harvest and Forest Products
Industry, 2011. Gen. Tech. Rep. PNW-GTR-903. Portland,
OR: U.S. Department of Agriculture, Forest Service, PacificNorthwest Research Station. 39 p.
Bureau of Business and Economic Research (BBER). 2016. Forest
Industries Data Collection System (FIDACS). Missoula, MT.
Bureau of Business and Economic Research, Forest Industry
Research Program. Unpublished dataset.
Crandall, M.S.; Anderson III, J.L.; Rubin, J. 2017. Impacts ofRecent Mill Closures and Potential Biofuels Development on
Maine’s Forest Products Industry. Maine Policy Review. Volume
26, Issue No. 1. 9p.
Daniels, J.M.; Scudder, M.G.; Marcille, K.C.; Berg, E.C.; Morgan,
T.A. (2017). Alaska Log Exports & Timber Harvest Analysis.
Extension of BBER White Paper prepared for PNW Research
Station. Manuscript in Preparation.
Halbrook, J.M.; Morgan, T.A.; Brandt, J.P.; Keegan, C.E., III;
Dillon, T.; Barrett, T.M. 2009. Alaska’s Timber Harvest andForget Me Not Cabins owner Ron Jones mills white spruce logs on a portable Wood-Mizer in Southcentral Alaska.
(Kate Marcille, BBER)
Forest Products Industry, 2005. Gen. Tech. Rep. PNW-GTR787. Portland, OR: U.S. Department of Agriculture, Forest
Service, Pacific Northwest Research Station. 30 p.

employment by NAICS industry. http://www.bea.gov/iTable/
iTable.cfm?reqid=70&step=1&isuri=1&acrdn=6#reqid=70&step=1&isuri=1. (October 17, 2016).

Oregon Department of Forestry (ODF). 2015. Oregon Timber
Harvest Data (1962-2015. Salem, Oregon: Oregon Department
of Forestry, State of Oregon Government. https://data.oregon.
gov/Natural-Resources/Timber-Harvest-Data-1942-2015/v7yh-3r7a. Accessed August 8, 2016.

U.S. Department of Commerce, Bureau of Economic Analysis(USDC BEA). 2014. Regional Input-Output Modeling System(RIMS II). https://www.bea.gov/regional/rims/rimsii/.

U.S. Department of Commerce, Bureau of Economic Analysis(USDC BEA). 2016. Table SA05N. Personal income by major
source of earnings by NAICS industry. http://www.bea.gov/
iTable/iTable.cfm?reqid=70&step=1&isuri=1&acrdn=6#reqid=70&step=1&isuri=1. (October 17, 2016).
U.S. Department of Commerce, Bureau of Economic Analysis(USDC BEA). 2016. Table SA25N. Total full-time and part-time

United States Department of Commerce, International Trade
Commission Dataweb (USITC). 2016. USITC Interactive Tariff
and Trade Data Web 3.1.0. Washington, D.C.
Washington State Department of Natural Resources (WA-DNR).
2015. Washington State Timber Harvest Reports. Olympia,
Washington. http://www.dnr.wa.gov/TimberHarvestReports.
Accessed on January 4, 2017.

7

Watson, P.; Wilson, J.; Thilmany, D.; Winter, S. 2007. Determining Economic Contributions and Impacts: What is the
Difference and Why Do We Care? The Journal of Regional
Analysis and Policy. 37(2): 140-146.
HOW TO CITE THIS PUBLICATION

Marcille, Kate C.; McIver, Chelsea P.; Berg, Erik C.; Morgan, Todd A.; Christensen, Glenn A.; 2017. Alaska’s Forest
Products Industry and Timber Harvest, Part 3: Sales, Employment and Contribution to the State’s Economy. Forest
Industry Brief No. 9. Missoula, MT: University of Montana, Bureau of Business and Economic Research.
CONTACT INFORMATION

Kate C. Marcille
Bureau of Business and Economic Research
University of Montana
Gallagher Business Building, Suite 231
Missoula, MT 59812
kate.marcille@business.umt.edu
www.bber.umt.edu/fir
http://fia.fs.fed.us

Todd A. Morgan
Bureau of Business and Economic Research
University of Montana
Gallagher Business Building, Suite 231
Missoula, MT 59812
todd.morgan@business.umt.edu
www.bber.umt.edu/fir
http://fia.fs.fed.us

A full set of data tables are also available at: http://www.bber.umt.edu/pubs/forest/fidacs/AK2015Tables.pdf

USDA is an equal opportunity provider and employer.