Alabama offers a very pro-business environment. We welcome industry with substantial support and assistance, low taxes, right-to-work laws, minimal regulation, and constructive environmental permitting procedures.
I think that Alabama’s economic development community is second to none. We have great people involved in economic development and great partnerships at all levels, including multiple public/private partnerships. Alabama Power is a key player in that regard and a great attribute for the State of Alabama.
Stephens: Thank you for that. We certainly try to help our industrial customers and our state in any we can. Let’s talk numbers for a bit. In 2016, Alabama recorded forest products industry projects at $1.2 billion in new investment with more than 1,000 anticipated jobs. Where do we stand currently? How is the industry impacting our state?
Muehlenfeld: I don’t have final numbers yet for 2018, but I can say 2017 was another good year for forest products investment with $1.28 billion in new and expanding projects announced. There are 1,464 new jobs directly created with these investments. Over the last three years we have had 3,386 jobs and announced $3.38 billion in forest products investments. Regarding the economic impact to our state, I estimate that the value of shipments from forest products in 2017 was $16.31 billion. I anticipate these numbers to continue to grow.
Stephens: How does this impact other sectors?
Muehlenfeld: The indirect impacts of the forest industry are often underappreciated. The employment multipliers for forest products are quite good, generally 2.5 – 3.5, depending on the specific operation. The annual payroll from forest products employment is estimated to be $2.24 billion, and the value added from manufacturing is estimated at $8.79 billion. Additionally, most wood-consuming manufacturing operations will purchase all their raw material near their plant, usually within 75 miles, depending on the size of the operation. That can be a very large economic impact that generally stays within the region, benefiting landowners, loggers, and trucking companies.
Stephens: You were quoted in an article from Made in Alabama as saying the forest industry is on a prolonged upswing after a very severe industry recession. How is Alabama playing a role in this upswing today? What specific segments are contributing to the upswing?
Muehlenfeld: Ten years ago, the great recession the nation experienced was more like the great depression for the forestry industry. But, like most industries, it’s cyclical and we’re now on the other side of that cycle with investments starting to boom. While most of the nation is playing catch-up, the South benefited because we have the lowest cost structure in North America and the strongest resource position.