Forestry & Logging
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,100 companies in the US forestry and logging industry are involved in natural resource management and harvesting. Companies may own and manage the land and harvest the trees and plants, or provide contracted services to public and private landowners. Over 1 billion trees are planted in the US annually – the equivalent of three plantings for each tree harvested.
Worker Injuries And Fatalities
While the logging industry has made efforts to reduce injury rates it ranks as the most dangerous occupation in America.
Pest Infestations
The spread of invasive plants, diseases, and insects that target woodlands are growing and destroying stands of timber in the US.
Industry size & Structure
The average forestry and logging company operates out of a single location, employs 6 workers and generates $1-2 million in annual revenue.
- The forestry and logging industry consists of about 8,100 companies that employ about 44,500 workers and generate about $12 billion in annual revenue.
- The industry consists of foresters that maintain woodlands and loggers that harvest timber.
- Over 1 billion trees are planted in the US annually – the equivalent of three plantings for each tree harvested. The US has recorded over 50 consecutive years of net forest growth that exceeds yearly harvest, according to the North American Forest Foundation.
- About one-third of the US is covered in forest; 58% is classified as private land and 42% is public.
- 94% of firms have fewer than 20 employees.
- The industry's gross output is volatile and can change 20% from year to year.
- Large companies include ALRT Corporation, C & C Logging, Huffman-Wright, and the timber operations of vertically integrated companies like Weyerhouser, Mid-South Lumber, Green Diamond Resources, and PotlatchDeltic.
Industry Forecast
Forestry & Logging Industry Growth
Recent Developments
May 27, 2024 - Employment, Prices Declining Amid Falling Sales
- Producer prices for logging companies declined 2.4% in March after falling 1.9% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Prices logging companies can command for their products have been declining amid falling sales of wood products. Employment by logging companies, which is highly seasonal, shrank by 6.7% in April year over year to an all-time low, while average industry wages rose 13.4% in March versus the same period last year to $29.50 per hour, just shy of their all-time high in February.
- Reforestation efforts in the aftermath of extreme wildfires in the US are being hobbled by a lack of seedlings and workers to plant them, The New York Times reports. According to American Forests, the potential exists to reforest 148 million acres (an area the size of California and Washington combined) in the contiguous US. To reforest those acres, US tree nurseries would need to more than triple production from 1.4 billion seedlings to 5.1 billion seedlings grown annually. Players in reforestation efforts include the federal and some state governments, which are dedicating more money than they have in generations to planting projects. The Replant Act, a major reforestation measure folded into the massive Infrastructure Law, would quadruple funding for the US Forest Service to restore national forests and aid in carbon sequestration efforts. However, tree nurseries are hesitant to ramp up production amid uncertain future demand, NYT reports.
- New home construction – a driver of demand for lumber and other wood building products – is expected to increase this year amid growing buyer frustration with the nation’s lack of housing stock, Realtor Magazine reports. New-home sales traditionally account for about 10% to 12% of the market for single-family homes but recently have comprised more than 30%, per Realtor.com. “The new-home market is becoming a dominant player, and we expect that to continue in 2024,” said Ali Wolf, chief economist with housing research firm Zonda. Nationwide, single-family housing starts are forecast to increase 4.7% this year and another 4.2% in 2025, reaching a pace of 1.3 million units, according to the National Association of Home Builders. A majority (80%) of builders anticipate starting more homes this year, with 51% expecting starts to increase more than 10% compared to 2023, Zonda’s Wolf said.
- Architectural billings – a key leading indicator of construction activity – predict a solid year for the construction market in 2024, albeit a slower rate of growth than in 2023. According to the American Institute of Architects (AIA), overall gains in construction spending are projected at just under 6%, with almost 3% for the commercial sector, 15% for industrial facilities, and 4% for institutional buildings. Commercial construction will continue to benefit from the billions of dollars in infrastructure investment from the Inflation Reduction Act and the CHIPS and Science Act, which are still working their way into the economy. While final numbers for 2023 aren’t in yet, total construction spending in 2023 is forecast at $1,960 billion, an increase of 6.0% over 2022, with nonresidential spending leading that growth, Contractor Magazine reports. Demand for lumber and other wood products is driven by construction activity.
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