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September 15, 2016

Report: Maine loggers contribute $882M to state economy

Photo / Tim Greenway
Photo / Tim Greenway
Tom Cushman, owner of Maine Custom Woodlands, on a feller buncher in the woods in Gray. According to a new report by the Professional Logging Contractors of Maine, companies like Maine Custom Woodlands contribute a combined $882 million to the state's economy.
Photo / James McCarthy
Dana Doran, executive director of the Professional Logging Contractors of Maine. PLC released a study showing Maine's logging industry contributed an estimated $882 million to the state's economy in 2014.

The Professional Logging Contractors of Maine today released a comprehensive study showing Maine's logging industry contributed an estimated $882 million to the state's economy in 2014.

The study, conducted with the University of Maine and Farm Credit East, revealed logging supported more than 7,300 jobs in the Maine economy in 2014, including more than 4,600 direct logging jobs and additional jobs in industries including trucking.

"For the first time ever in the state's history, it provides an economic impact for the logging industry in Maine," PLC Executive Director Dana Doran told Mainebiz in a phone interview. "We're able to quantify in real numbers the importance and value of a strong logging workforce in Maine, not only to the economy, but to all the many industries and communities in the state that depend on Maine wood."

The report's message: Without loggers the entire forest products industry and the timber value chain, upon which hundreds of workers and their communities depend, would collapse. Its release is timely, given that the Maine Forest Products Council is slated to release at its annual meeting in Orono on Monday an updated report on the overall value of the state's forest-dependent industries. Its 2013 report pegged the total impact at $8 billion, making it one of Maine's largest industries.

Doran said the two reports will help lawmakers and other economic policymakers understand what's at stake for both loggers and the overall forest products industry, which have been rocked by the closure of paper mills and biomass power plants in recent years. "This is an industry facing large challenges in markets and costs that threaten not only loggers, but the entire forest economic value chain that depends on loggers," he said.

With the loss of markets, Doran said there is currently a "glut of wood" that has depressed prices and added to the economic challenges facing Maine loggers. He expects the study will be used to inform discussions with lawmakers when the new Legislature convenes in January, as well as the Biomass Commission created by the 127th Legislature that will be drafting its recommendations in October.

The report's findings

Doran said the analysis completed by the University of Maine and Farm Credit East is based on data gathered from approximately 60% of the PLC's member companies that's based on 2014 metrics as well as a fall 2015 survey of PLC members requesting employment, harvest and equipment outlay information for 2013 and 2014.

Here are some highlights:

  • Average annual wage for workers employed by logging firms rose from $30,751 in 2004 to $42,795 in 2014. Worker wages and proprietor income for 2014 exceeded $296 million.
  • Over that same 10-year period the study showed the numbers of logging firms and workers have remained relatively stable in recent years.
  • Survey respondents reported an average of 22 employees per firm: with 12 working in the woods, two in the office, six in trucking and two mechanics.
  • There's a clear move to mechanization in the industry: Fully 63% of surveyed firms were identified as whole tree harvesting operations and another 26% as cut-to-length harvesting operations. Both use combinations of mechanized logging equipment such as feller bunchers, delimbers, grapple skidders, forwarders and harvesters to cut, yard and process wood. Only 11% were identified as conventional hand crews using chainsaws.
  • Most firms surveyed trucked all or the majority of timber harvested themselves, while 24% relied on outside sources contracted for trucking. The study estimated logging supports approximately 750 trucking jobs in Maine.
  • The study also showed logging is an expensive industry, with average capital expenditures per firm being $626,000 per year.

Data supplied by the Maine Forest Service for 2014 showed that 14.19 million tons of timber were harvested in Maine in 2014, including 7.3 million tons of pulpwood, 4 million tons of saw timber and 2.9 million tons of biomass.That was an increase over 2013, when data showed 14 million tons of timber were harvested in Maine, including 7.6 million tons of pulpwood, 3.8 million tons of saw timber and 2.7 million tons of biomass.

The value of timber sales in 2014 was estimated at $493 million.

Wood, wood pulp, and paper and paperboard were Maine's fourth, fifth and sixth most valuable exports, respectively, for 2015, according to the U.S. Census Bureau.

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