Total economic contributions were estimated using a regional economic model constructed with licensed IMPLAN© software (Version 3) and associated 2015 Florida county datasets (http://implan.com/). IMPLAN© is an input–output/social accounting matrix modeling system. Input–output analysis is a standard, transparent technique for estimating the broad economic impacts resulting from changes in specific economic activities in a regional economy (Miller and Blair 2009). These economic models account for the transactions between industries, governments, employees, and households and provide detailed estimates of impacts on the regional economy from changes in final demand, which is the value of goods and services produced and sold to
- Industry output: The dollar value of a good or service produced or sold, which is comprised of both the value of intermediate inputs and value added, and is equivalent to sales revenues plus changes in business inventories.
- Value added: A broad measure of income, representing the sum of employee compensation, proprietor income, other property income, indirect business taxes and capital consumption (depreciation), that is comparable to Gross Domestic Product. Value added is a commonly used measure of the contribution an industry makes to a regional economy because it avoids double counting of intermediate sales.
- Labor income: Wages, salaries and benefits paid to local workers within a region.
- Employment: A measure of the number of jobs involved, including fulltime, part-time, and seasonal positions. It is not a measure of fulltime equivalents (FTEs).
Regional economic models enable the estimation of economic multipliers that measure the total changes in an economy resulting from a given change in direct output, income, or employment. Economic multipliers incorporated in the regional economic model can measure the estimated total contribution to the regional economy for an industry of interest. Multipliers are comprised of direct, indirect, and induced components:
- Direct effects: the initial direct contribution from the industry of interest
- Indirect effects: the changes in inter-industry transactions as supplying industries respond to changes in demands from the directly affected industries
- Induced effects: changes in local spending that result from income changes in employee and proprietor households and local, state, and federal governments
Regional economic models can be constructed within IMPLAN© for a single county, groups of contiguous counties, an entire state, or a multi-state region. In this case, the study region was defined as the state of Florida. Data from IMPLAN© used to model contributions in this report represent the economic structure of the Florida economy in 2015. The model was constructed with social accounts for households, governments (state/local and federal), and capital investment internalized. This analysis used the Trade Flows specification of the IMPLAN© model customized to avoid double-counting of direct impacts, consistent with best practice for economic contribution analysis (Henderson et al., 2017; Joshi et al. 2017).
The forest industry sectors used in this analysis are described according to the North American Industry Classification System (NAICS) code corresponding to each IMPLAN© industry sector, as shown below.
Description of forest industry and forest-based
recreation sectors in NAICS and IMPLAN
|NAICS Industry Sector Description (2017)|
|15||Forestry, forest products, and timber tract production||1131-2||Establishments primarily engaged in the operation of timber tracts for the purposes of selling standing timber, growing trees for reforestation and/or gathering forest products, such as gums, barks, balsam needles, rhizomes, fibers, Spanish moss, ginseng, and truffles.|
|16||Commercial logging||1133||Establishments primarily engaged in cutting timber, cutting and transporting timber, and/or producing wood chips in the field.|
|19||Support activities for agriculture and forestry||11531||Establishments primarily engaged in performing particular support activities related to timber production, wood technology, forestry economics and marketing, and forest protection. These establishments may provide support activities for forestry, such as estimating timber, forest firefighting, forest pest control, treating burned forests from the air for reforestation or on an emergency basis, and consulting on wood attributes and reforestation.|
|47||Biomass electric power generation||221117||Establishments primarily engaged in operating biomass electric power generation facilities. These facilities use biomass (e.g., wood, waste, alcohol fuels) to produce electric energy. The electric energy produced in these establishments is provided to electric power transmission systems or to electric power distribution systems.|
|134||Sawmills||321113||Establishments primarily engaged in sawing dimension lumber, boards, beams, timbers, poles, ties, shingles, shakes, siding, and wood chips from logs or bolts. Sawmills may plane the rough lumber that they make with a planing machine to achieve smoothness and uniformity of size.|
|135||Wood preservation||321114||Establishments primarily engaged in treating wood sawed, planed, or shaped in other establishments with creosote or other preservatives, such as alkaline copper quat, copper azole, and sodium borates, to prevent decay and to protect against fire and insects and/or sawing round wood poles, pilings, and posts and treating them with preservatives.|
|136||Veneer and plywood manufacturing||321211-2||Establishments primarily engaged in manufacturing hardwood veneer and/or hardwood plywood and manufacturing softwood veneer and/or softwood plywood.|
|137||Engineered wood member and truss manufacturing||321213-4||Establishments primarily engaged in manufacturing fabricated or laminated wood arches and/or other fabricated or laminated wood structural members and manufacturing laminated or fabricated wood roof and floor trusses.|
|138||Reconstituted wood product manufacturing||321219||Establishments primarily engaged in manufacturing reconstituted wood sheets and boards.|
|139||Wood windows and door manufacturing||321911||Establishments primarily engaged in manufacturing window and door units, sash, window and door frames, and doors from wood or wood clad with metal or plastics.|
|140||Cut stock, resawing lumber, and planing||321912||Establishments primarily engaged in manufacturing dimension
lumber from purchased lumber, manufacturing dimension stock (i.e., shapes) or
cut stock, resawing the output of sawmills, and planing purchased lumber.
These establishments generally use woodworking machinery, such as jointers,
lathes, and routers to shape wood.
|141||Other millwork, including flooring||321918||Establishments primarily engaged in manufacturing millwork (except wood windows, wood doors, and cut stock). Examples of manufactured millwork produced by these establishments include: clear and finger joint wood moldings, decorative wood moldings, ornamental woodwork, stairwork, wood flooring, and wood shutters.|
|142||Wood container and pallet manufacturing||321920||Establishments primarily engaged in manufacturing wood pallets, wood box shook, wood boxes, other wood containers, and wood parts for pallets and containers.|
|145||All other miscellaneous wood product manufacturing||321999||Establishments primarily engaged in manufacturing wood products (except establishments operating sawmills and preservation facilities; establishments manufacturing veneer, engineered wood products, millwork, wood containers, pallets, and wood container parts; and establishments making manufactured homes (i.e., mobile homes) and prefabricated buildings and components).|
|146||Pulp mills||322110||Establishments primarily engaged in manufacturing pulp without manufacturing paper or paperboard. The pulp is made by separating the cellulose fibers from the other impurities in wood or other materials, such as used or recycled rags, linters, scrap paper, and straw.|
|147||Paper mills||322121-2||Establishments primarily engaged in manufacturing paper (including newsprint and uncoated groundwood paper) from pulp. These establishments may manufacture or purchase pulp. In addition, the establishments may also convert the paper they make.|
|148||Paperboard mills||322130||Establishments primarily engaged in manufacturing paperboard (e.g., can/drum stock, container board, corrugating medium, folding carton stock, linerboard, tube) from pulp. These establishments may manufacture or purchase pulp. In addition, the establishments may also convert the paperboard they make.|
|149||Paperboard container manufacturing||322211-2
|Establishments primarily engaged in laminating purchased paper or paperboard into corrugated or solid fiber boxes and related products, such as pads, partitions, pallets, and corrugated paper and converting paperboard (except corrugated) into folding paperboard boxes and containers, without manufacturing paper and paperboard.|
|150||Paper bag and coated and treated paper manufacturing||322220||Establishments primarily engaged in cutting and coating paper and paperboard; cutting and laminating paper, paperboard, and other flexible materials (except plastics film to plastics film); manufacturing bags, multiwall bags, sacks of paper, metal foil, coated paper, laminates, or coated combinations of paper and foil with plastics film; manufacturing laminated aluminum and other converted metal foils from purchased foils; and surface coating paper or paperboard.|
|151||Stationery product manufacturing||322230||Establishments primarily engaged in converting paper or paperboard into products used for writing, filing, art work, and similar applications.|
|152||Sanitary paper product manufacturing||322291||Establishments primarily engaged in converting purchased sanitary paper stock or wadding into sanitary paper products, such as facial tissues, handkerchiefs, table napkins, toilet paper, towels, disposable diapers, sanitary napkins, and tampons.|
|153||All other converted paper product manufacturing||322299||Establishments primarily engaged in converting paper or paperboard into products (except containers, bags, coated and treated paper, stationery products, and sanitary paper products) or converting pulp into pulp products, such as egg cartons, food trays, and other food containers from molded pulp.|
|165||Other basic organic chemical manufacturing (forest chemicals)||325193-4
|Establishments primarily engaged in manufacturing nonpotable ethyl alcohol, distilling wood or gum into products, such as tall oil and wood distillates, distilling coal tars, manufacturing wood or gum chemicals, such as naval stores, natural tanning materials, charcoal briquettes, and charcoal (except activated), manufacturing cyclic crudes or cyclic intermediates (i.e., hydrocarbons, except aromatic petrochemicals) from refined petroleum or natural gas, and manufacturing other basic organic chemical products (except aromatic petrochemicals, industrial gases, synthetic organic dyes and pigments, gum and wood chemicals, cyclic crudes and intermediates, and ethyl alcohol).|
|269||Sawmill, woodworking, and paper machinery||333243||Establishments primarily engaged in manufacturing sawmill and woodworking machinery (except handheld), such as circular and band sawing equipment, planing machinery, and sanding machinery, and/or manufacturing paper industry machinery for making paper and paper products, such as pulp making machinery, paper and paperboard making machinery, and paper and paperboard converting machinery.|
|395||Wholesale trade||42331||Establishments primarily engaged in wholesaling merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The merchandise described in this sector includes lumber; plywood; reconstituted wood fiber products; wood fencing; doors and windows and their frames (all materials); wood roofing and siding; and/or other wood or metal millwork.|
|402||Retail – Gasoline stores||447||Establishments primarily engaged in retailing automotive fuels (e.g., gasoline, diesel fuel, gasohol, alternative fuels) and automotive oils or retailing these products in combination with convenience store items. These establishments have specialized equipment for the storage and dispensing of automotive fuels.|
|404||Retail – Sporting goods, hobby, musical instrument and book stores||451||Establishments primarily engaged in retailing and providing expertise on the use of sporting equipment or other specific leisure activities, such as needlework and musical instruments. Book stores are also included in this subsector.|
|496||Other amusement and recreation industries||71391-3,
|Establishments primarily engaged in operating golf courses (except miniature); operating golf courses, along with dining facilities and other recreational facilities that are known as country clubs; operating docking and/or storage facilities for pleasure craft owners, with or without one or more related activities, such as retailing fuel and marine supplies; and repairing, maintaining, or renting pleasure boats; and providing recreational and amusement services.|
|499||Hotels and motels, including casino hotels||72111-2||Establishments primarily engaged in providing short-term lodging in facilities known as hotels, motor hotels, resort hotels, motels, and casino hotels. The establishments in this industry may offer food and beverage services, recreational services, conference rooms and convention services, laundry services, parking, table wagering games, and other gambling activities, such as slot machines and sports betting, and other services.|
|501||Full-service restaurants||722511||Establishments primarily engaged in providing food services to patrons who order and are served while seated (i.e., waiter/waitress service) and pay after eating. These establishments may provide this type of food service to patrons in combination with selling alcoholic beverages, providing carryout services, or presenting live nontheatrical entertainment.|
|520||Other federal government enterprises||N/A||N/A|
|523||Other state government enterprises||N/A||N/A|
Inputs to the IMPLAN© model for sector-level analysis of the Florida forest industry are summarized in the table below. For most industry sectors, the annual average of direct employment in 2016 from the Quarterly Census of Employment and Wages was entered in the IMPLAN© model. Stumpage values were used for private, state, and federal forestry production sectors. For the pulp mill and logging sectors, employment information from the IMPLAN© database (2015) were used. The number of employees in wood and gum chemicals and biomass electricity generation were taken from the Hoovers/Dunn and Bradstreet database. The IMPLAN© software automatically imputed industry sales for the employment numbers entered based on the industry average output per employee ratios. The software also applied industry-specific deflators to express output in model year (2015) values, then reinflated the resulting impact estimates to express in current year (2016) dollars. For the Wholesale Trade sector used to represent lumber and wood wholesalers, a trade margin of 17.7 percent was applied to the imputed industry sales. For recreational visitor retail purchases, trade margins were applied to purchases at gasoline stores and sporting goods stores. Only the export share of industry output was considered as new final demand for which we account for the indirect and induced contributions, in keeping with best practice for economic contribution analysis (Watson et al, 2007).
Total economic contributions were calculated for each major industry group: forestry production, primary wood products, secondary wood products, primary paper products, converted paper products, forest chemical products manufacturing, allied manufacturing, wholesale trade in lumber and wood products, and biomass electric power generation. Total economic contributions were also estimated for forest-based nonresident visitor spending. State-level results were allocated to individual counties in proportion to timber removals for forestry production and in proportion to direct employment in all other industry groups. Results for individual Florida counties were aggregated to analyze results for the nine functional economic regions in Florida, as defined by the U.S. Department of Commerce’s Bureau of Economic Analysis (Johnson and Kort, 2004). County level results were also aggregated to analyze results for categories along the Urban-Rural Continuum, as defined by the U.S. Department of Agriculture’s Economic Research Service.
Henderson, J., O. Joshi; S. Tanger, L. Boby, W. Hubbard, M. Pelkki, D. Hughes, T. McConnell, W. Miller, J. Nowak, C. Becker, T. Adams, C. Altizer, R. Cantrell, J. Daystar, B. Jackson, J. Jeuck, S. Mehmood, and P. Tappe. 2017. Standard Procedures and Methods for Economic Impact and Contribution Analysis in the Forest Products Sector, Journal of Forestry 115 (2): 112-116. Available at: http://www.ingentaconnect.com/contentone/saf/jof/2017/00000115/00000002/art00006
Johnson, K. and J. Kort. 2004. Redefinition of the BEA Economic Areas. Survey of Current Business, Nov. 2004. United States Department of Commerce, Bureau of Economic Analysis, Washington, D.C. Available at http://www.bea.gov/scb/pdf/2004/11November/1104Econ-Areas.pdf
Joshi, O., J. Henderson, S. Tanger, L. Boby, M. Pelkki, and E. Taylor. 2017. A Synopsis of Methodological Variations in Economic Contribution Analyses for Forestry and Forest-Related Industries in the US South, Journal of Forestry 115 (2): 112-116. Available at: http://www.ingentaconnect.com/contentone/saf/jof/2017/00000115/00000002/art00002
Watson, P., J. Wilson, D. Thilmany, and S. Winter. 2007. Determining economic contributions and impacts: what is the difference and why do we care? Journal of Regional Analysis and Policy 37 (2): 140-146. Available at http://www.jrap-journal.org/pastvolumes/2000/v37/F37-2-6.pdf