NORTH CAROLINA – Technology is changing every facet of the forest products market. That may mean fewer jobs in the the sector as the industry shifts to labor-saving technology, with the steepest declines in the pulp and paper sector, according to a new report released by Southern Research Station and Southern Region, as well as the Southern Group of State Foresters.

"From how trees are cut, to how they are processed at sawmills, and every step in between, technology is changing the industry," said Forest Service scientist Jeff Prestemon. Prestemon specializes in forest economics and co-authored the report with economist Jinggang Guo, from Louisiana State University. The report - Southern Forest Outlook Markets - was released by the Southern Research Station and Southern Region, as well as the Southern Group of State Foresters.

The report also found:

• The South is projected to continue to be a net exporter of forest products.

• Prices of industrial roundwood are projected to rise, reversing recent downward trends.

• If mass timber were more widely used, the southern softwood market would strengthen.

• Additional trade barriers would enhance softwood exports and reduce hardwood exports.

• Most scenarios project a growth in wood pellet production in the South.

• The two-decade decline of jobs in the pulp and paper sectors is projected to continue, due to new labor-saving technologies and reduced demand for newsprint and printing.

Wood pellet production is projected to rise across all southern states except in the scenario that combines high warming and low economic growth. The report also discusses market effects of the COVID-19 pandemic.

"Wood is actually a new trend in sustainable building," said Prestemon. "Mass timber, as it's called, is produced to be strong enough to replace concrete or steel. If mass timber continues to catch on, then the South's softwood market would grow."

The report is part of a regional assessment, known as the Southern Forest Outlook. Its goal is to inform forest sector decision makers and the interested public about observed trends, anticipated futures and critical issues that are based on authoritative synthesis and interpretation of existing science, data and projections. This is the first of four reports that will be released in the coming months, with a report on water that is expected in December.

For decades, Forest Service scientists have conducted region-wide assessments of natural resources in the South. In fact, results from past assessments were used to develop research priorities for the Southern Research Station, including fire, water, markets and restoration. The Southern Research Station and the Southern Region both work closely with the Southern Group of State Foresters, and the results of the market report are organized by state.

The Southern Forest Outlook relies on the same core scenarios as the 2020 Resource Planning Act Assessment, which in turn relies on climate projections developed by the 2014 Intergovernmental Panel on Climate Change. The four main scenarios vary along two axis: high, moderate or low amounts of economic growth and warming. The research team modified two scenarios to explore how markets would be affected if mass timber became more widely used in construction and if trade restrictions and costs increased. All of the scenarios consider how changes in income, population, climate, technology and trade openness could affect markets.

The new report build on the Southern Forest Futures Project, which was completed in 2012. Since then, the southern forest products sector has grown. Barriers to international trade have also grown, the size of the forest sector workforce has contracted, sawtimber prices have fallen, and standing timber inventory has increased.

Read the report.