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Executive Summary of 

 1996 Revised Report 



In December 1994, ECONorthwest studied the economy of Southeast 

 Alaska and concluded that a reduced timber supply from the Tongass 

 National Forest would have a minor impact on the region's economy, and 

 this impact would be confined largely to the timber industry. Our report 

 documented that the timber industry represents a relatively small fraction of 

 the region's total economy and that, since 1990, Southeast Alaska's economy 

 had grown steadily even as the timber industry was shrinking. We found 

 that the growth industries in the region are tourism, fishing, and trade, all of 

 which may benefit from reduced logging. We discussed the unique 

 importance of subsistence in Southeast Alaska, an economic and cultural 

 activity which is directly harmed by logging. Finally, we noted that Southeast 

 Alaska's experience was consistent with the Pacific Northwest, which has 

 ezp>erienced significant growth in total employment as employment in the 

 timber industry declined. 



One year later ECONorthwest reviewed the latest economic data frt>m 

 Southeast Alaska. This data strongly reinforces the findings and conclusions 

 described above. The region's total employment continues to climb as 

 employment in the timber industry continues its downward trend. Between 

 1988 and 1996, total employment in Southeast Alaska increased at an 

 average-annual rate of 2.2 percent, in refreshing contrast to the average- 

 annual decline of almost 7 percent for employment in the region's lumber, 

 wood products, and gulp industries. In 1995, those directly employed in the 

 timber industry accounted for less than 6 percent of the region's total 

 employment, and many of these workers were nonresidents. 



Clearly, Southeast Alaska's economy is diverse and strong enough to 

 absorb reductions in timber harvest yet keep growing. In fact, since 1988, 

 employment and earnings have increased steadily in every sector of the 

 region's economy except timber — construction, transportation, trade, and 

 services, to name a few. 



Fishing, tourism, and the quality of the natural environment contribute 

 to the regional economy's diversity and strength. Reductions in logging may 

 have a positive effect on these driving forces of economic growth. For 

 example, in a report to Congress in 1995, the Alaska Region of the U.S. 

 Forest Service concluded that existing measures of habitat protection are 

 inadequate and greater protection is needed to avoid declines in salmon and 

 steelhead runs. As another example we note that a 1995 report concluded 

 that while the number of boat-based tourists in Southeast Alaska is 

 increasing dramatically, the number of suitable anchorages has declined, in 

 part, due to logging. 



Reduced Timber SuppJy From Tongass ECONorthwest Page i 



