payrolls in the logging and timber processing indus- 

 tries. Employment per unit of lumber and plywood 

 produced in the United States dropped quite sharply 

 until the mid-1960's, but has leveled off since then.'*' 

 Some slight further declines may occur as manufac- 

 turers install labor-saving equipment in an effort to 

 hold down costs in the face of rising prices for raw 

 materials. However, the absence of any significant 

 current trend suggests that future levels of employ- 

 ment per unit of output may be close to those at the 

 present time. 



On this basis, it is estimated that the 17 billion 

 board feet shortfall in softwood supplies referred to 

 above would be associated with a level of timber 

 industry employment in the year 2030 that is some 

 90,000 man-years less than would have existed if 

 softwood timber supplies were large enough to meet 

 base level projections of demand. Impacts on total 

 economy-wide employment would be much larger 

 because of the multiplier effect. Multiplier estimates 

 derived by input-output analysis indicate that the 

 associated total potential job losses in regional econ- 

 omies will be more than 250,000. Such impacts are 

 especially critical because of the higher rates of 

 unemployment frequently found in communities that 

 are heavily dependent on timber or other' natural 

 resources. 



Analysis of the relationship between lumber prices 

 and construction cost'*^ indicates that a 1.0 percent 

 increase in the price of softwood lumber will lead to 

 an 0.16 percent increase in the construction cost 

 index of residences. Given estimates of the elasticity 

 of demand for housing,''^'''' a 1.0 perceat rise in the 

 price of lumber will also lead to an 0.08 percent 

 decrease in the number of housing units built. 



The demand-supply equilibrium analysis presented 

 above shows that softwood lumber prices will be 

 some 82 percent higher in 2030 than the level in 1977. 

 An increase of this size would result in a 7 percent 

 reduction in output of residential units from the levels 

 that would have existed with stable timber product 



■" Lumber and plywood production data from the U.S. Depart- 

 ment of Agriculture, Forest Service. The demand and price situa- 

 tion for forest products. Miscellaneous Publication Series. Annual. 

 Employment data from the U.S. Department of Commerce, 

 Bureau of Economic Analysis. Survey of current business. 

 Monthly. 



■•2 American Appraisal Company, Inc. Boeckh construction cost 

 index for residences. In Construction Review. U.S. Department of 

 Commerce, Industry and Trade Administration, Washington. Vol. 

 24, No. 8, p. 17. 1978. 



"•s Reid, Margaret G. Housing and income. University of Chi- 

 cago Press. Chicago. 405 p. 1962. 



** Muth, Richard F. The demand for nonfarm housing. In The 

 demand for durable goods. Arnold C. Harberger (Ed.), University 

 of Chicago Press. Chicago, p. 29-96. 1960. 



prices. Increased substitution of competing materials 

 might partially mitigate this impact, but the possibil- 

 ity of future rises in the relative prices of competing 

 materials also must be considered, as must the costs 

 of adapting building technology to utilize them. 



Increases in consumer expenditures for timber 

 products, or for commodities such as furniture made 

 wholly or in part from them, is a major consequence 

 of rising timber prices. The effect of rising timber 

 prices will be partially offset by substitution of com- 

 peting materials but, despite this, consumers will 

 suffer substantial potential reductions in well-being. 

 It is estimated that they will pay some $7 billion more 

 for wood products and competing materials in 2030 

 because of the lack of sufficient softwood timber to 

 maintain relative prices of processed wood at the 

 1977 level. 



The effects of rising timber prices on the Nation's 

 energy consumption and on environmental quality 

 are also substantial. Materials such as steel, alumi- 

 num, concrete, and plastics that compete with wood 

 products, are derived from nonrenewable resources. 

 Greater energy requirements are necessary for utiliz- 

 ing nonrenewable resources than for timber resour- 

 ces;'*5 and there are associated and serious problems 

 of waste disposal and deteriorating environmental 

 quality.''^ On the other hand, lumber and wood pro- 

 ducts are in a relatively favorable position because of 

 recyclability, biodegradability, and the lower levels of 

 air and water pollutants associated with their 

 manufacture.'*^ 



The possibility of adverse environmental and en- 

 ergy impacts depends to a large extent on the degree 

 to which substitute materials displace wood products 

 as timber prices rise. Reports of the Committee on 

 Renewable Resources for Industrial Materials pro- 

 vide information on the technical substitut ability of 

 competing materials in residential construction."^ 

 This information suggests that 17 billion board feet 

 loss in timber output would involve an increase of 

 some 40 million tons in the use of concrete and some 

 20 million tons of steel. On the basis of the findings of 

 a Committee panel, it was estimated that 17 billion 

 board feet of softwood timber would require some 60 

 trillion British thermal units (Btu) of energy for its 



■" Abelson, Philip H., and Allen H. Hammond. The new world 

 of materials. Science, 101(4228)633-636. 1976. 



•"■Carpenter, Richard A. Tensions between materials and envi- 

 ronmental quality. Science, 191(4228) 665-668. 1976. 



■"Cliff, Edward P. Timber: the renewable resource. Report to 

 the National Commission on Materials Policy. Washington, D.C. 

 149 p. 1973. 



•** Committee on Renewable Resources for Industrial Materials. 

 Renewable resources for industrial materials. National Research 

 Council, Washington, D.C. 267 p. 1976. 



255 



