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 50,700 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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 27, 2024 - Jobs Fell, Wages Rose in 2023
                                • Employment by logging companies fell 3.4% in December compared to a year ago on the heels of a 1.3% decline in the previous annual comparison, according to the US Bureau of Labor Statistics. Employment by logging companies, which is highly seasonal, has largely been trending downward for about a decade. By comparison, average wages at logging companies have been rising, ending 2023 at $28.46 per hour in December, an 8% year-over-year change and just below their peak in November, BLS wage data show. After rising sharply from July 2020 to July 2022, producer prices for logging companies fell 5% in December compared to a year ago due to declining demand for lumber.
                                • 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 “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 that 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.
                                • Demand for utility poles is booming, driven by a surge in public and private infrastructure spending, The Wall Street Journal reported in November. Utility poles, hewn from big trees, are seeing high demand from power companies, the federal broadband and green energy initiatives and the need to replace aging poles. Currently, North American demand for utility poles is outpacing capacity, resulting in higher prices for standout trees, according to WSJ. To satisfy the surge in demand for pole-worthy trees companies are hunting for the largest, straightest, and knot-free conifer trees. Pole makers are paying private landowners premiums over the next highest value product in each local wood market to procure top trees. Major beneficiaries include Koppers Holdings, owner of a pole plant in Southeastern Georgia, and Canada’s Stella-Jones, which dominate the American pole business, per WSJ.
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