Forestry

The West Yellowhead region is the province’s top producer of forest products, such as lumber, oriented strand board (OSB) and wood pulp.  It is also the province’s largest lumber producer.  In 2009, the region accounted for 34.1% of all the wood fiber processed in the province.  As a result, the region’s two largest manufacturing sectors are wood products (mainly lumber and OSB) and pulp and paper.  

Of the 7.1 million cubic metres of logs consumed by these two manufacturing sectors in the West Yellowhead region in 2009, 71% was used to produce lumber, 24% to produce pulp and paper, and 6% to produce OSB.  OSB production tumbled by 70% between 2005 and 2009.  Over the same period, lumber production rose 3% and pulp and paper production fell by 16%. 

In 2009, forestry accounted for about 6,000 jobs (direct plus indirect and induced jobs) in the region, down from 8,700 jobs in 2005.  About 2,150 of these jobs are direct jobs (processing jobs), a 32% decline from 2005.  In Census year 2006, total employment in the region was 46,190.  As the forestry sector accounted for an estimated 8,700 jobs (direct plus indirect and induced) in the same year, about 19% of the region’s jobs are directly or indirectly related to the forestry industry.  The loss of about one-third of forestry employment between 2005 and 2009 would have a serious impact on the entire region.

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 West Yellowhead region’s wood products and pulp and paper sectors totaled about $800 million in 2009, a 36% decline from 2005.  The region also produces about $30 million of secondary wood products, such as cabinetry and millwork.

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 early 2009.  However, these prices have increased sharply by about one-third since then.  OSB prices peaked in early 2004 at nearly US$500 per thousand square feet, and bottomed out in the first half of 2009 at US$120.  Since then, they have risen to about US$200.  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-2436