The U.S. forest products sector is very dynamic, and contributes a substantial amount of employment, income, manufacturing sales, and value added to rural forest economies throughout the country. Overall, forest products comprise about 1.5% of the total U.S. economy, and contribute about 5% of total manufacturing output in the country. Furthermore, the forest products sector is one of the top three contributors to most southern state economies.
The forest products industry creates incentives for property owners to manage their forests rather than convert them to other uses with a higher financial return, such as development. These working forests deliver many ecosystem services that society values—fresh water, carbon sequestration and storage, erosion control, natural disaster mitigation, biodiversity, recreation, foods, and medicinal plants.
The industry also provides markets for the by-products of forest management and restoration, such as small timber from hazardous fuels reduction and after-fire salvage harvests. In some areas of the West and interior Alaska, the lack of a forest products industry means that owners have no financial incentive to improve forest health. These owners must then decide whether to restore their forests at their own expense, for the benefit of all.
The United States is both the biggest consumer and the biggest producer of forest products, making almost 30 percent of the world’s forest products in all major categories.
The size and organization of the forest products sector have changed over recent decades because it is a cyclical industry, sensitive to fluctuations in the domestic economy and to long-term changes in output markets, consumer preferences, technology, and global economic growth.
The overall trend in the U.S. share of global production, mostly made up by solidwood products and pulp and paper, has been decreased production in most categories. For some products, the decline has been evident since the 1960s; others have slipped since the late 1990s. Trends point toward further declines, even while domestic production of particular products, such as wood pellets, increases.