Forest product production and trade statistics focus on wood-based goods, historically the main products derived from forests and for which established markets exist. For many forest owners and managers, wood products are by far the most important source of income and employment in forestry and thus are playing a major role in rural recovery and development.
Analysis of the System of National Accounts offers a sound basis for harnessing the potential of sustainable forestry and forest provisioning functions. Accounts that permit the precise isolation of forest-related production are those referring to the wood-based industry (hereafter referred to as the forest sectorb), comprising the categories “harvesting and logging”; “solid wood products” and “pulp and paper”. Wood furniture and wood energy are accounted for in the System of National Accounts under furniture manufacturing and energy, respectively, and can be disaggregated. Data for wood energy still tend to be underreported and unreliable, although an exception is the production and trade of wood pellets, which is a relatively well-documented product that is commanding an increasing share of wood-based energy in total final energy consumption.
The total contribution of the (formal) forest sector to the global economy increased by 17 percent (nominal) between 2011 and 2015.56 It directly contributed more than USD 663 billion to world GDP in 2015.57 Taking into account the total economic effects (i.e. direct, indirect and induced economic contributions), including demand on other sectors and expenditure on labour income, the forest sector contributed more than USD 1.52 trillion to national economies in 2015 (up by 17 percent over 2011) (Table 1).58 The pulp-and-paper sector was responsible for the highest direct generation of value added, at 31 percent, followed by forestry and logging and solid wood products (about 25 percent each of total sector value added). Furniture manufacturing contributed 19.6 percent. Asia (especially East Asia) dominates value-adding in the forest sector for all subsectors, contributing more than half the value added in all subsectors except furniture manufacturing.
Table 1Estimated direct and total economic contribution of the world’s forest sector to gross domestic product, by subsector, 2015
These estimates are calculated using model data from 62 countries, which account for 70 percent of the world’s total forest area and, in 2015, contributed 94 percent to global GDP and produced 93 percent of the total global industrial roundwood (IRW) as well as 94 percent of sawnwood, 97 percent of wood-based panels and 98 percent of paper and paperboard.59 In addition, a set of econometric modelsc was used to estimate the economic multipliers of forest subsectors in countries without data. The results are helpful for the comparative analysis of the forest sector in national economies, but the national and global aggregates are underestimated due to the high informality of the sector, especially for non-exporting segments, and the weak reporting of forest-sector statistics, particularly in Africa. The lack of consistent data for sub-Saharan Africa downplays the economic role of the sector in that important producer region.
Wood products commanded about 2.3 percent of the value of global exports and imports in 2020. IRW removals amounted to 2.07 billion m3 in 2018 and dropped to 2.02 billion m3 in 2019 and to 1.98 billion m3 in 2020, the latter fall likely influenced by the impacts of the COVID-19 pandemic.60
The forest sector accounts for about 1 percent of global employment
The employment and income generated by the forest sector is a key issue for policymakers looking at ways to support recovery from the COVID-19 pandemic. Worldwide, more than 19.2 million people were estimated to have been directly employed in the formal forest sector in 2015,59 with the four subsectors (forestry and logging, solid wood products, pulp and paper, and furniture manufacturing) contributing roughly similar quantities of jobs. More than half the formal jobs worldwide were in Asia, especially East Asia. The estimated combined direct contribution of the formal and informal forest sector to employment in 2017–2019 was 33.3 million jobs (based on 185 countries representing 99 percent of the global forest area; data exclude furniture manufacture) (Table 2).61 This comprises about 1 percent of total employment globally for all economic activities. In 2017–2019, the majority of people in all regions (comprising 58 percent of total forest-sector employment) were employed in the manufacture of wood and wood products. The forestry and logging subsector also played an important role in employment, especially in Africa, where it accounted for 42 percent of total forest-related employment.
Table 2Total direct formal and informal employment in the forest sector, by region and subsector, 2011–2013 and 2017–2019
For the formal sector only, estimates of the employment economic multiplier indicate that, for every 100 jobs in the sector in 2015, 73 additional jobs were supported (on average) in the national economy. These comprised 39 jobs in supplying sectors through backward linkages and 34 jobs in other sectors due to spending on goods and services by employees in the forest sector and its suppliers.59
The economic multipliers vary by subsector. In general, the processing subsectors (i.e. solid wood products, pulp and paper, and furniture manufacturing) tend to have higher multipliers in value added and employment than the forestry and logging subsector. Thus, having domestic wood-based manufacturing industries not only increases value added and creates employment in the forest sector, it also generates more value added and supports jobs in other sectors through indirect and induced effects.
Informal employment (included in Table 2) is important in the forest-sector labour market. FAO estimates that, in 56 countries for which data were available, 7.7 million persons were employed informally in 2017–2019, which was 70 percent of the total forest-sector-related employment in those countries. The share of informal employment can be as high as 80 percent of total forest-sector-related employment in Asia and Oceania and 90 percent in Africa.61
An estimated 3.2 million women were employed in the forest sector in 68 countries for which data were available in 2017–2019, which was 23 percent of total forest-sector-related employment in those countries. Fewer women than men are employed in the forest sector in most countries, with a participation rate of 4–49 percent of total forest-related employment.62 Nevertheless, the share of female employment in the sector is higher than that of men in some countries, particularly in Africa. Most female employment in the forest sector is informal and is often related to the gathering and production of woodfuel and NWFPs (and may be underestimated in the figures above).
The forest sector has been resilient in the face of the COVID-19 pandemic, but there have been significant impacts on woodfuel consumption
The COVID-19 pandemic caused a decline of 3.5 percent in the global economy in 202063 and is estimated to have pushed 124 million people into extreme poverty (i.e. people living on less than USD 1.90 a day).64 There is no empirical evidence to support negative or positive effects of the pandemic on deforestation and forest degradation – even though deforestation increased in 2020, it is not possible to attribute this to the COVID-19 pandemic.65 Nevertheless, forests face additional pressure due to the increased number of people living in poverty and the greater constraints faced by informal producers and small and medium-sized enterprises. Wood product markets have shown resilience in the face of the pandemic (Box 3).
Box 3The impact of the COVID-19 pandemic on wood production and trade
The COVID-19 pandemic appears to have had differential impacts on certain segments of the paper and paper products industry (Figure 7). The production of graphic papers, comprising newsprint and printing and writing papers, which has declined by 2–3 percent per year since 2007, dropped by 11.8 percent in 2020; global imports and exports also fell (by 13.6 percent and 15.9 percent, respectively). The steep drops in 2020 coincided with a spike in online activities precipitated by the pandemic, including business meetings, schooling and news consumption, thus reducing demand for printed paper.
Figure 7Trends in the production of two main types of paper product, 1961–2020
In contrast, the production of other paper and paperboard (including packaging paper and paperboard and household and sanitary papers) grew by 3 percent in 2020, to 304 million tonnes. The increase was likely due to pandemic-induced online shopping, combined with an increase in the use of sanitary-paper products in hospitals.
Overall, there was a 5.1 percent reduction in wood product exports in 2020 and a 7 percent drop in imports, but the trade fluctuated over the year; a dramatic decline in the second quarter of 2020 was followed by a steep recovery. 66,67
Market information from 2020 has not led to strong changes in projections for wood products to 2050. The Global Forest Products Model (GFPM)d projects an increase in the global production of IRW of 28 percent between 2020 and 2050, to 2.5 billion m3. The main producers are projected to be Europe (32 percent of total IRW production), North America (25 percent) and East Asia (16 percent). North America, Latin America and the Caribbean and Oceania are projected to be net exporters, supplying regions such as East, Central, South and West Asia, North Africa and Europe.68 These estimates do not take the COVID-19 pandemic into account, but a GFPM simulation run in May 2021 indicated a possible long-term impact of the pandemic to 2050 for woodfuel consumption (an increase of 200 million m3 compared with a scenario that does not take the pandemic into account) and almost no impact on long-term IRW production.69
Early evidence is available on the impacts of the COVID-19 pandemic on patterns and quantities of woodfuel production through case studies. For example, an assessment of the impacts of the pandemic in Kenya found that one-quarter of informal urban settlement households using liquefied petroleum gas before the pandemic switched their cooking fuel to wood or kerosene during a pandemic-related lockdown.70 Future projections based on observed trends suggest that the number of people in sub-Saharan Africa relying on polluting fuels – i.e. unprocessed biomass (wood, crop residues and dung), charcoal, coal and kerosene – is likely to exceed 1 billion by 2025.71