Michigan’s expanding forest products industry contributes more than $26 billion to state’s economy

Michigan’s forest products industry has hit a new peak, adding $26.5 billion to Michigan’s economy, according to new data released by the Michigan Department of Natural Resources.

That figure represents the impact of the industry in 2022, the most recent figures available, and is up $4 billion from 2019.

“Although the number of people directly employed in the industry decreased by 3.6%, all other economic indicators show significant growth,” said Jagdish Poudel, DNR forest economist. Those indicators include the average wage, labor income, output and industry productivity.

The increase in total output can be attributed to a strong forest products industry and its links to other industries. Additionally, Arauco, the largest particleboard manufacturer in the world, opened its $450 million Grayling production facility in 2019. Arauco directly generates around 220 jobs, which in turn create additional indirect and induced effects in the economy.

A growing impact

The forest products industry includes forestry and logging, wood furniture, pulp, paper, paperboard products and woody biomass power generation.

“Michigan’s forests provide a sustainable source for building materials, furniture and paper and cardboard products,” said Jeff Stampfly, chief of the DNR’s Forest Resources Division and the state forester. “We are always looking for ways to best support the industry and respond to the public’s increasing desire for sustainability.”

Michigan’s 20.2 million acres of forest cover about half the state and are concentrated in the Upper Peninsula and the northern Lower Peninsula. Nearly 4 million of those acres are DNR-managed state forest lands. The DNR works hand in hand with industry to support and expand it. For example, the woody biomass power generation industry sector directly generates around 120 jobs in Michigan. Biomass power is sustainable and uses materials with little value such as mill and manufacturer residues, logging residues and low-value forest products. The DNR also is partnering with Michigan State University and Michigan Technological University to promote mass timber construction, a new building technique that allows for the construction of large and tall buildings using engineered wood panels and beams instead of traditional steel and concrete. The DNR’s new customer service center in the eastern Upper Peninsula is currently under construction using mass timber materials made from Michigan red pine.

Economic power

The forest products industry contributed 40,449 direct jobs during 2022 and supported a total of 88,275 jobs, according to the report. “Each job in the forest products industry generates an additional 1.1 jobs in the economy,” Poudel said. The average wage in the forest products industry is nearly $80,000 annually. Pulp, paper, paperboard and other paper products comprise the largest sector, with a combined direct output of $7.7 billion. Primary and secondary solid wood products generated nearly $5.6 billion in direct output. Wood furniture generated about $2.4 billion and forestry and logging about $470 million. Learn more on the DNR’s forest products industry webpage.

Note to editors: Accompanying photos are available below for download. Caption information follows.

• Mass timber: For future growth of the forest products industry, the DNR is working with Michigan State University, Michigan Technological University and industry partners to promote the carbon-storing construction technique and develop ways to use abundant Michigan tree species. This photo shows detail of the MSU STEM Teaching and Learning Facility’s interior.
• Harvest: Timber is loaded onto a trailer for transport. Michigan’s forest products industry is expanding, thanks to new investment from global companies such as Arauco, which opened a Grayling plant in 2019.