Michigan’s expanding forest products industry

The sector contributes $26.5 billion to the state economy

PUBLISHED ON July 15, 2024

LANSING, Michigan — Michigan’s forestry industry has reached a new high, contributing $26.5 billion to the state’s economy, according to new data from the Michigan Department of Natural Resources.

This figure represents the industry’s impact in 2022, the most recent figures available, and is $4 billion higher than 2019.

“Although the number of people directly employed in the industry declined by 3.6%, all other economic indicators show significant growth,” said Jagdish Poudel, DNR forestry economist. These indicators include the average wage, labor income, production and productivity of the industry.

The increase in overall production is due to a strong forest products industry and its connections to other industries. In addition, Arauco, the world’s largest particleboard manufacturer, opened its $450 million Grayling manufacturing facility in 2019. Arauco directly creates around 220 jobs, which in turn brings additional indirect and induced effects on the economy.

A growing impact

The forest products industry includes forestry and logging, wood furniture, pulp, paper, paperboard products and electricity generation from wood biomass.

“Michigan’s forests are a sustainable source of building materials, furniture, and paper and paperboard products,” said Jeff Stampfly, chief of the DNR’s Forest Resources Division and state forester. “We are always looking for ways to best support the industry and meet the public’s growing desire for sustainability.”

Michigan’s 20.2 million acres of forest cover about half the state and are concentrated in the Upper Peninsula and northern Lower Peninsula. Nearly 4 million of those acres are state forest lands managed by the DNR.

The DNR works hand-in-hand with industry to support and grow it. For example, the woody biomass power generation industry sector directly creates about 120 jobs in Michigan. Biomass power is sustainable and uses low-value materials such as mill and manufacturer residues, wood waste, and low-value forest products.

The DNR is also working with Michigan State University and Michigan Technological University to promote mass timber construction, a new construction technique that allows for the construction of large and tall buildings using engineered wood panels and beams instead of traditional steel and concrete. The DNR’s new customer service center in the eastern Upper Peninsula is currently being built using mass timber materials made from Michigan red pine.

Economic power

The forest products industry created 40,449 direct jobs and secured a total of 88,275 jobs in 2022, the report said.

“Every job in the forest industry creates 1.1 additional jobs in the economy,” Poudel said. The average wage in the forest industry is nearly $80,000 a year.

Pulp, paper, board and other paper products constitute the largest sector with a total production of US$7.7 billion. Primary and secondary solid wood products generated direct production of almost US$5.6 billion. Wood furniture generated about US$2.4 billion and forestry and logging about US$470 million.

For more information, visit the DNR’s forest products industry webpage.

— Michigan Department of Natural Resources