West Virginia is the third most heavily forested region in the nation covering over 12 million acres or 79% of the state’s land area. As such, forests play a significant role in the state’s economy, serving as a strong foundation for a substantial forest products industry (FPI). It is the only natural resource industry that provides jobs in all of the state’s 55 counties. West Virginia remains one of the top wood-producing states in the country, annually yielding more than 700 million board feet of hardwood lumber, 770 million square feet of OSB, and 800 million square feet of veneer (WV Department of Commerce, 2017).
However, WV’s FPI has historically been sensitive to major economic events. Gabbert et al. (2020) examined the historical performance of the industry in the state spanning the years 2006 to 2017 and showed how the industry was affected by various factors such as the housing market collapse of the mid-2000s, various recessions, increasing global competition, a natural gas boom, and other macro-economic trends or shocks. The industry suffered a significant decline in its economic contribution to the state during the period 2006–2010, which could be attributed to the collapse of the housing market.
The WV FPI experienced considerable improvement over the period 2010–2015, showing increasing economic contributions to the state’s economy. This performance was again consistent with that of the housing market, where recovery started picking up after the housing collapse in 2007–2008. The industry experienced continued improvement through 2017, directly contributing 1.1% of all employment, 1.0 % of gross state product, a total of 10,198 jobs in direct jobs and $2.2 billion in direct output. By 2018, the industry contributed about 10,099 in direct jobs and $2 billion in direct output, a slight decrease from 2017 levels (Gazal and McNeel, 2020).
and 2022.
When COVID-19 pandemic hit in 2020, the industry experienced a decline in its economic contributions to the state’s economy. Specifically, direct employment was at 8,868 or a decline of 12% from 2018. Direct output was at $1.8 billion or a 10% decline from 2018 (Gazal and McNeel, 2022).
This article presents an update to an earlier report detailing the economic contribution of the WV FPI to the state’s economy. The last report looked at economic data from 2018, while this follow-up report examines 2022 data provided through a program called IMPLAN. The analysis of economic contributions made by the forest products industry over time is crucial to better understand its role to the regional economy. Such data can provide policymakers and other interested groups (e.g., industry members, industry organizations/associations, landowners) important information for policy and industry decisions.
For the most part, economic contributions of the forest products industry in WV have been higher in 2022 compared to 2018, except for direct and total employment and direct employee compensation. This indicates that even with the recent pandemic, the industry is performing better in 2022. While there was a downturn during the peak of the pandemic, the industry seems to have shown resilience and has mostly recovered. Even with fewer employees, the industry managed to increase production and value-added, indicating that it is becoming more efficient probably from increased automation and other technological improvements in the production process. In fact, the economic contributions of WV FPI in 2022 have surpassed the levels prior to the Great Recession. The results indicate that the pandemic has forced the industry to respond to the crisis by adopting measures to increase efficiency and reduce reliance on physical labor highlights the importance of supply chain resilience and diversification to mitigate the impact of future crises.
1 Gabbert, C.C., K.A. Gazal, and J. McNeel. 2020. Economic contribution of West Virginia’s forest products industry over time: a look at 2006, 2010, 2015 and 2017 data. Forest Products Journal 70(2): 200–212., 2 Gazal, K.A. and J.M. McNeel. 2022. Economic contributions of the West Virginia Forest Products Industry: Impact of the COVID-19 pandemic. 2022 Central Hardwood Conference, Morgantown, WV., 3 Gazal, K.A. and J.M. McNeel. 2020. Economic contribution of West Virginia’s forest products industry: 2018 update. WVFA Mountain State Forestry, Summer 2020.,4 West Virginia Department of Commerce. 2017. WV Industries—Wood Products. Online at http://www.wvcommerce.org/business/industries/woodproducts/default.aspx.
