Forestry contributes billions to local economies

Forestry contributes billions to local economies

FWPA has contributed funding to new research highlighting the socio-economic contribution of two of Australia’s major forest regions, and identifying industry areas of concern and business outlook.

While forestry businesses identified some challenges regarding recruitment and business conditions, the new research results overall reinforce the industry’s vital importance to local employment in regional areas and to the broader Australian economy. 

Covering the Green Triangle area in southwest Victoria and southeast South Australia, and several regions in Western Australia (WA), the research was conducted by the University of Canberra and research company Econsearch, a division of BDO, and funded by FWPA with additional funding from the Forest Products Commission and the Forest Industries Federation of Western Australia.

The reports present up-to-date data that was previously lacking, focusing on the primary production and primary processing sectors of native forest, softwood and hardwood plantations and imported timber.

By the numbers

Economic impact

  • In 2015-16, the forestry industry contributed $649 million to the WA economy in direct sales and a total of $1.405 billion once flow-on effects in other industries are included
  • For the Green Triangle, it contributed $1.17 billion in direct sales and $1.909 billion with flow-on effects
  • In the same time period, the WA forest industry directly contributed around $257 million to GRP (the regional equivalent of GDP) and a total of $643 million with flow-on effects
  • The Green Triangle directly contributed $382.9 million to GRP and a total of $729 million with flow-on effects.

Employment

  • A combined total of 9,817 jobs were generated in WA and the Green Triangle
  • In some local government areas, it accounted for as much as 13.2 per cent of total employment (including secondary processing).

Working conditions and diversity

  • 84 per cent (WA) and 88 per cent (Green Triangle) of workers were employed full-time in 2016, around 20 per cent higher than the broader workforce – consequently they were more likely to earn higher incomes
  • Males dominated the workforce with 79 per cent males in WA and 87 per cent in the Green Triangle.

Challenges

Recruitment was an identified challenge, with two thirds of businesses in WA and 70 per cent in the Green Triangle finding it difficult to recruit managers and high level professional staff. Other challenging roles to recruit included heavy machinery operators and transport workers.

This was attributed to a lack of candidates with the appropriate skills, a lack of candidates based locally and the large time and investment required to build worker skills.

In terms of workforce, there was a significant lack of gender diversity, and workers were older and ageing more quickly than was typical for the broader population.

A number of business challenges were reported during the study, with common issues across both locations including a lack of investment in the industry and government regulation.

WA businesses also identified the following barriers:

  • Lack of access to resources (in the form of harvestable timber from native forest or plantations)
  • Lack of demand for goods
  • Difficulty maintaining competitiveness with other similar businesses.

Green Triangle businesses also reported challenges regarding:

  • Increasing cost of labour
  • Difficulty obtaining labour 
  • Rising input costs.

The analysis shows overall that the number of jobs generated by the industry has declined significantly since 2006, highlighting the importance of local processing of wood and fibre.

Takeaways

While relatively few businesses feel demand will decline for their products, many report conditions as being more challenging than usual and find it difficult to recruit some types of workers.

This suggests the current trend of employment decline is likely to continue unless there is significant investment in additional plantation estate or processing capacity.

You can read the reports in full which include results segmented by region and sector, on our website: 

Photo credit: Piotr Krzeslak/Shutterstock

 

Our acknowledgment

In the spirit of reconciliation, Forest & Wood Products Australia acknowledges the Traditional Custodians of Country throughout Australia, and we acknowledge their connection to the land and their custodianship of Country and forests. We pay our respect to Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples.

Our acknowledgment