Employment and Income in Related Trade and Service Industries 



Basic industry to total industry employment multipliers were derived from 

 census data for the study area and subareas. These multipliers approxi- 

 mate the relationship between forestry and forest products industry 

 compared with total industry. These multipliers were used to develop 

 data in table 10. 



Data from table 10 were combined with levels of earnings in types of 



employment to develop tables 11 and 12, which show the relative economic 



importance of the forest industry to the income and employment of the 

 basin. 



Capital Investment in Forestry Industries 3/ 



Capital investments in mills and equipment have been increasing in most 

 industries State-wide. Almost without exception, lumber and wood pro- 

 ducts industries have led the field in new capital investment, accounting 

 for over 25 percent of the State total in recent years. After such heavy 

 expenditures for new mills and equipment, one would expect increases in 

 productivity in terms of value added per employee hour, but such 

 increases are not evident. Perhaps more lag-time is needed to bring out 

 these gains--or perhaps the heavy investments have merely forestalled 

 decline in labor productivity. Factors contributing to keeping labor 

 productivity down include: decreased size of trees which reduces harvest 

 and mill efficiency; shift of harvesting to more inaccessible and steeper 

 sites which reduces harvesting efficiency; and stricter regulation of 

 logging practices on public land to protect the environment which has 

 increased costs and reduced harvest labor efficiency. The maximum 

 installed production capacity of 1,094 million board feet for the whole 

 lumber industry in the study area exceeded net growth, allowable cut, and 

 actual cut for 1970. 



Forest Products Projections and Related Economic Effects 



The National projections, disaggregated to this river basin, indicate a 

 24 percent increase in industrial roundwood by 1990 and a 60 percent 

 increase by 2020 over the annual harvest volume of 1970. Most of the 

 production would be of saw and veneer logs (from large-diameter trees). 

 Demand for pulpwood will also increase from 0.7 million cubic feet in 

 1970, to 5.9 million cubic feet in 1990, and to 16.6 million cubic feet 

 in 2020. The demand for other roundwood, such as posts and poles, will 

 remain relatively constant (table 13). 



3/ Material paraphrased from A Profile of Forestry Employment 

 in Montana , by Richard L. Porterfield, USDA Forest Service Research Paper 

 lNT-172, 1975. 



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