Selective Cuttings

Forest sector employment in 2012: stabilizing but challenges remain

April 9, 2013

Employment in the Canadian forest sector seems to have turned a corner. After employment growth was basically flat in 2011, in 2012 it increased by 1% to 235,900. While only a small increase, it is the first increase since 2002.

However, not all regions saw employment increase (see figure below). In Atlantic Canada and the Prairies, employment declined by 6.5% and 10.3% respectively. These declines were more than made up for by increases in Quebec (2.4%), Ontario (4%), and BC (6.1%). Quebec continues to have the largest forest sector employment in Canada, followed by BC and Ontario, who are roughly tied.

Forest sector employment (by region)

This chart shows the trend of Canada’s forest sector employment from 1990 to 2012, including the breakdown by regions. Employment trend varied across regions. While employment in Atlantic Canada and Prairie declined by 6.5% and 10.3%, employment in Quebec, Ontario, and BC were up 2.1%, 4% and 6.1% respectively.

Employment trends also varied significantly across forest subsectors (see figure below). Between 2004 and 2009, the U.S. housing crash and global recession hit the sector hard, eliminating about 1/3 of employment across all subsectors. Since then, employment in the wood product manufacturing industry has begun to recover, employment in supporting activities and in forestry and logging industry stabilized, but employment in pulp and paper product manufacturing has continued to decline.

Forest Sector Employment (by sector)

This chart shows the trend of Canada’s forest sector employment from 1990 to 2012, including the breakdown by major forest subsectors. In 2012, total employment stood at 235,900. Though it is only slightly up 1.1% compared to the level of 2011, it is the first increase over the past decade. While employment in supporting activities and wood product manufacturing industry was recovering, employment in forestry and logging industry, as well as pulp and paper product manufacturing industry experienced further decline.

Employment in the pulp and paper product manufacturing industry in 2012 was 68,200, down 8.8% from 2011, reaching its lowest level since at least 1990. This decline was not unexpected in view of the enormous challenges that face this sector, starting with the structural decline of newsprint and printing & writing papers, and continuing with a cyclical slowdown in market pulp markets.

Employment in the wood product manufacturing industry has turned a corner, up +2.7% (to 115,900). This is a clear signal that the solid wood sector is recovering, thanks to the bounce back of the U.S. housing market and robust offshore lumber exports, particularly to China.

Unexpectedly, employment in forestry and logging activities experienced a 2.7% decline (to 25,600), while employment in supporting activities was up at +35.8% (to 26,200). It seems that declines in pulp and paper impacted the forestry and logging side of the business more than the increases in the wood products side. It is unclear why employment in supporting activities was up so sharply, however we will wait for future numbers to see whether this was a statistical anomaly, or if the trend continues.

With lumber and wood panel markets further recovering, it is very likely there will be further employment increases in wood product manufacturing industry in 2013. Meanwhile, as challenges facing pulp and paper manufacturing industry still exist, the downward pressure on employment in this sector will likely remain. Overall, we can hope for modest improvements in employment through 2013.