Forestry Industry Sees Economic Hit Due To COVID-19

Apr 10, 2020

Economic impacts to the housing industry as well as others due to the coronavirus have caused a hit to the forestry industry.
Credit USDA - McKeand

As the coronavirus pandemic continues to impact the economy, sectors involving forestry industry are no exception.

According to research from the University of Arkansas at Monticello’s College of Forestry, Agriculture and Natural Resources, changes in housing, manufacturing as well as consumer goods are also shifting the forest products industry. 

Dr. Matthew Pelkki is the chair of forest economics at the University of Arkansas at Monticello. He says paper products are seeing varying demands depending on the products themselves, with most seeing a decline.

"Fine writing papers and certain types of packaging papers are in decline. And then people aren’t buying new homes, people aren’t going out and remodeling a lot of their homes and doing a lot of expensive work so the lumber industry is being depressed," Pelkki said.

According to Pelkki, another way the coronavirus is impacting the lumber industry is decreasing the availability of workers.

"Immigrant workers are having difficulty coming in and that’s reducing the amount of people that are available for tree planting and other types of forestry activities like pruning trees and helping fertilize trees, so we’re seeing overall less production," Pelkki said.

With the logging industry just coming out of its wet season, Pelkki said the coronavirus has further delayed any possible work, causing job loss and unemployment. Additionally COVID-19 is impacting employers in the forest industry in the form of recruitment.

"Once people move away to a different type of job, bringing them back into the industry oftentimes is very difficult and so responding or recovering from this type of economic upheaval caused by the COVID-19 virus is really difficult for this industry to respond to," Pelkki said.

One forestry sector that is seeing a greater demand is in sanitary products like wipes or toilet paper. However, Pelkki says it’s hard to increase production in the pulp and paper industry because machines are already running near capacity.

"So to add capacity often takes huge capital investments and a lot of training of new workers. So it’s really difficult to just increase tremendously for example the amount of toilet paper, the amount of sanitary paper products and the amount of disinfectant wipes that the country can produce," Pelkki said.

Though investment in the forestry industry is needed to expand the output of those desired products, Pelkki is not optimistic that the national or state government will take the needed action.

"Arkansas has some of the most incredible timber resources. We are the third most timber dependent economy in the nation. But this issue that we have is the wood markets, we kind of operate out in the background. We’re in the forest and people don’t see us and think about the importance of wood products on a day to day basis," Pelkki said.

In addition to an economic impact, Pelkki says a decline in the forestry industry also has environmental consequences.

"Not only is it the jobs that it produces particularly in rural areas, but it’s the clean air and clean water. When we have declines in the use of wood products whether it’s for housing or for paper, it causes a ripple effect all the way down that can actually have negative impacts on the health of Arkansas’s forests," Pelkki said.