According to a leading academic, sawmill closures and production curtailments in the state of Montana will have an effect on its ability to recover when the US housing market rebounds, underlining the need for companies to work to ride out the current construction climate.
Montana’s production volumes, worker numbers and wages have all tumbled over the past two years, according to Todd Morgan, director of forest industry research at the University of Montana’s Bureau of Business and Economic Research.
This will have a negative effect on the state’s ability to recover when market conditions are more favourable he said.
Last year, Brian Zak from Canada Wood said the Canadian industry would see a “groundswell amongst the survivors”, with “a new resolve and a new strength” for those that had ridden out the situation.
“The extent to which Montana’s industry recovers when markets improve however, will depend largely on timber availability,” said Mr Morgan.
“With the uncertainty of timber availability in Montana, it can be difficult to rebuild capacity when markets eventually rebound.”
Mr Morgan’s figures show Montana’s lumber production volumes fell 21.2% from the first half of 2006 to 387 million board feet in the first six months of 2008; the number of production workers shrank from more than 3,500 in the first half of 2006 to 3,068 in 2008; and total wage spend dropped from more than US$66m to below US$60m.
