Forestry

The North Central region is the province’s third largest producer of forest products, such as lumber and wood pulp.  It is also the province’s largest producer of pulp.  As a result, one of the region’s largest manufacturing sectors is pulp and paper.  In 2009, the region accounted for 17.5% of all the wood fiber processed in the province.  

Of the 3.7 million cubic metres of logs consumed by these two manufacturing sectors in the North Central region in 2009, 11% was used to produce lumber and 89% to produce pulp.  Lumber production fell by 28% between 2005 and 2009 and pulp production rose 19%. 

In 2009, forestry accounted for about 2,200 jobs (direct plus indirect and induced jobs) in the region, down from 2,700 jobs in 2005.  Just under 800 of these jobs are direct jobs (processing jobs), an 18% decline from 2005.  In Census year 2006, total employment in the region was 20,885.  As the forestry sector accounted for an estimated 2,600 jobs (direct plus indirect and induced) in the same year, about 12% of the region’s jobs are directly or indirectly related to the forestry industry. 

Over the past four years, the value of shipments by Alberta’s wood products sector fell by one-half, mainly because of the precipitous decline of the U.S. housing market.  Between the first quarter of 2006 and the first quarter of 2009, U.S. housing starts fell from more than two million starts (on an annual basis) to fewer than 600,000 starts.  During the past 18 months starts have remained in the 500,000 to 600,000 range.  Canadian housing starts fell by one-half between mid-2008 and mid-2009, but have recovered most of their losses since then.  Alberta housing starts also peaked in 2006, and fell by more than one-half between 2006 and 2009.  Since then they have recovered strongly, but are not expected to return to 2006 levels over the near future.

The value of shipments by the North Central region’s wood products and pulp and paper sectors totaled about $720 million in 2009, a 12% increase from 2005.

The global economic and U.S. housing crises have had a profound impact on forest product prices.  Prices for lumber had dropped by more than one-half between early 2006 and the early of 2009.  However, these prices have increased sharply by about one-third since then.  Pulp prices dropped by less than 30% between mid-2008 and the second quarter of 2009 and reached new highs by mid-2010.

Date Updated:
RDP-2433