Timber town: analysis of the forest industry

Courtney Thatcher, Kristy King, and Tony Bowden at the Blowering Nursery.

Half of all Snowy Valleys workers reliant on forest industry

A new, in-depth study of the region’s forest industry has concluded that half of all employed people in the Snowy Valleys are reliant on the sector to survive.

The study, undertaken by the University of Canberra, the NSW Department of Industry, the Softwood Working Group (SWG), and Forest and Wood Products Australia, found that 18 per cent of workers in the Tumut and Tumbarumba regions are directly employed in the industry.

It then found that for every one person directly employed, 2.8 jobs were created, through “production-induced and consumption induced effects.”

In fact, $115 million in wages alone is paid to South West Slopes residents in a given year, which is then typically spent elsewhere in the region.

Softwood Working Group Economist Diana Gibbs said the results of the study, which involved six months of data crunching, were surprising even to those intimately familiar with the industry.

“We actually went back and checked some of the modelling not just twice but three times because the results were so good!” she said.

“When you look at the total workforce in Snowy Valleys shire, 50 per cent of all jobs are reliant on the forest sector – which is phenomenal! But when we went back and looked at the data we realised that it was because the area is an industry cluster.

“We’re so lucky; we don’t only grow the trees here but also process them here. All the support services that the industry requires are in the region as well, so if you need tyres or repairs or almost anything else, everything is right there.”

The study found that the economic impact of the timber industry in the South West Slopes is more than tourism in the Snowy Mountains, including the ski fields, and farm gate agriculture from Wagga to Albury, combined.

It put the output of the forest industry at over a billion dollars: $1,050,000,000. Including flow-on effects, it puts it at $2,130,000,000.

Comparatively, Snowy Mountains tourism injects $472 million into the economy, and the gross expenditure of farm gate agriculture in Tumut, Tumbarumba, Gundagai, Wagga Wagga, Greater Hume, and Albury is $526 million.

“The study demonstrated that the Tumut and Tumbarumba area is home to a global industry,” said Diana Gibbs.

“We’re talking about a billion dollars of output, it’s not to be sneezed at!

“These mills are growing the pine trees as well as manufacturing paper and timber products locally that would otherwise have to be imported from mills in Brazil, New Zealand, America, all over the world, and they happen to be located right here with us. It is a fantastic regional development success story for NSW.”

The South West Slopes for this study includes Albury, Greater Hume, Snowy Monaro, Snowy Valleys, Wagga, and also Bombala. It was undertaken alongside a University of Canberra study analysing the forest industry throughout all of Australia, due to be published soon.

Freshly cut logs in the Snowy Valleys.

Why are we importing 1m tonnes of wood fibre a year? 

Along with their recently published study of the socio-economic impacts of local timber, the Softwoods Working Group is also investigating the urgency of the need for more plantations.

They are collating that analysis in a separate study due to be published soon, and according to Softwoods Working Group economist Diana Gibbs, the need is a matter of simple maths.

Within the South West Slopes region surrounding Tumut and Tumbarumba, 65,161 hectares of pine plantations supply approximately 2.55 million tonnes of fibre annually to wood and paper processors located in this region, like Visy near Tumut and Hyne in Tumbarumba.

However, that 2.55 million tonnes isn’t enough to supply the enormous needs of the processing plants, who churn through 3.26 million tonnes of fibre each year. The shortfall is made up through imports, when according to the SWG, there is plenty of potential for it be grown locally.

“We’ve got a million tonnes a year coming in from places like Victoria and Oberon which is making the local industry vulnerable, if something happens to those plantations or they are required to service industry in those areas, then the SWS processors won’t have enough product,” said Ms Gibbs.

“If we want the existing industry to grow they need more resource, if we want to attract more industry to the area we need more resource, and if we want to protect what we’ve currently got then we need more resource; we need more trees in the ground.”

The SWG study found that the forest industry is currently healthy, with a majority of businesses expecting to break even or make a profit in the next twelve months.

However, a quarter expect to shed staff in the next year, and only 12 per cent expect to take on more hires. In the study, the authors write than one factor inhibiting further growth in the processing plants is the need to import wood materials, which adds substantial transport costs to their bottom line.

“The need to source fibre outside the region to meet current supply needs for the region’s mills presents some challenges for the industry,” they wrote.

“Processors [are] reporting that they cannot source additional fibre inputs within an economic transport distance from their mills, curtailing potential expansion and creating risk to current production if any of the fibre inputs currently imported from other regions become unavailable.

“Unless there is active investment in expanding the plantation estate, the most likely future scenario is that the supply of fibre plateaus or declines.

“With areas of plantation in the region lost to bushfires in recent years, and the potential for some privately owned plantations to be converted to agriculture after harvest, a decline in supply is a likely scenario.”

Ellen Kromar, Forestry Corporation Silviculture Supervisor, and Teresa Baker, Acting Silviculture Manager, at the Green Hills plantation.

What does the average timber worker look like?

The recent Softwoods Working Group/University of Canberra forest industry study looked in detail at the demographics of the workforce, and it reveals some interesting insights.

It won’t come as a surprise to many that the forest sector locally is characterised by long hours and good pay.

Thanks to the nature of shift work, 28 per cent of workers clock in the usual definition of strenuous hours: more than 49 hours per week. In logging, two-thirds of workers are doing over 49 hours a week.

However, they are getting paid for it.

Forest industry workers in the South West Slopes generally earned higher incomes than the average for the region. Forest industry workers were both less likely to learn low incomes and more likely to earn high incomes compared to other workers in the same area.

In Tumut, 41 per cent of forestry sector employees are earning more than $1250 a week, against 29.6 per cent of general Tumut workers. Only 7.6 per cent are earning less than $600 a week, against 18.6 per cent of the general workforce.

The sector is also dominant.

In Tumut 903 workers, or 18.6 per cent of all employed people, and in Tumbarumba 234 people and 16.2 per cent of the workforce, spend their days contributing to the industry. This includes over 100 different occupations, from scientists and other highly-skilled professionals, to loggers, to workers in the nurseries.

It is also characterised by how demanding it is on workers.

Eighty-eight per cent of all jobs in the sector, within the South West Slopes at least, are full time. That’s compared to 68 per cent of all employed people in the same region. Two per cent of workers are part-time, and eight per cent are casual.

The timber trade continues to conform to its gender stereotype: only 13 per cent of its employees are female, against 47 per cent of all employed people in the South West Slopes.

Over half of forest industry employees have not completed year twelve, and according to the study, that could be an area of concern in an era where processing plants have less and less need for manual labour.

While jobs in Tumut itself have increased in the field, “analysis of time series data suggests that the total amount of jobs directly dependent on the forest industry in the South West slopes has declined by approximately 5 per cent in the last six years. A similar decline (5.2 per cent) occurred in the total number of manufacturing jobs in Australia over the five years from 2006 to 2011,” wrote the authors of the study.

“This is not surprising for an industry in which a large proportion of jobs are reliant on manufacturing. Investment in new technology in the manufacturing sector, a requirement for maintaining competitiveness over time, typically results in declining employment even as production values are increasing.”

The most difficult to source occupations for businesses that took part in the study were: people with information and communication technology skills; specialist professionals such as physical and chemical engineers; mechanics; middle managers; skilled drivers; finance managers/bookkeepers; heavy machine operators; and silvicultural contractors.