You rarely see the term "cluster" in Oregon Labor Trends articles. This is due to the nebulous definition of a cluster. Our late and much beloved former senior analyst Eric Moore once stated, "many people don't know an industry cluster from a Goo-Goo Cluster." Hopefully, after reading this article, you will easily discern the confection from the industry concoction.
The Oregon Department of Forestry (ODF) provide a group of industry sectors that they consider the "Forest Cluster." Their definition is: "Forest cluster" means firms and organizations that support production of forest products and benefit from primary and secondary wood products. This includes a broad spectrum of forest ecosystem services as well as geographically concentrated and interconnected economic activities and linkages to customers and suppliers. Organizations engaged in forest resource management, education, and research are also considered part of the forest cluster.
Using industry employment data, it is still not possible to count every job that is included in this definition. For example, there may be professors in Oregon's university system teaching forestry, so those jobs fit the ODF forest cluster definition. But we don't have industry information that would be able to discern those teaching jobs from the hundreds of others at Oregon's higher education institutions. Short of that, the ODF provides a manageable list of NAICS industries that are included in their forest cluster definition. Data presented here include the geographic area from Lane County south to the Oregon-California border: Coos, Curry, Jackson, Josephine, Douglas, and Lane counties, areas of the state that have historically been reliant on the forest cluster.
|Oregon's Forest Cluster*|
|Custom Architectural Woodwork and Millwork Manufacturing|
|Forest Nurseries and Gathering of Forest Products|
|Forestry and Logging- Federal and State Government|
|Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers|
|Nonupholstered Wood Household Furniture Manufacturing|
|Other Converted Paper Product Manufacturing|
|Other Wood Product Manufacturing|
|Paper Bag and Coated and Treated Paper Manufacturing|
|Paper Industry Machinery Manufacturing|
|Paperboard Container Manufacturing|
|Pulp, Paper, and Paperboard Mills|
|Sawmill and Woodworking Machinery Manufacturing|
|Sawmills and Wood Preservation|
|Stationery Product Manufacturing|
|Support Activities for Forestry|
|Timber Tract Operations|
|Upholstered Household Furniture Manufacturing|
|Veneer, Plywood, and Engineered Wood Product Manufacturing|
|Wood Kitchen Cabinet and Countertop Manufacturing|
|Wood Office Furniture Manufacturing|
|Wood Television, Radio, and Sewing Machine Cabinet Manufacturing|
|*Definition of Forest Cluster from Oregon Department of Forestry|
The frenzied activity of the housing boom and soaring residential construction activity preceding the Great Recession merely slowed the longer-term decline in forest cluster employment in Southwestern Oregon. Technology advances, more automation, and less labor intensive manufacturing processes all conspired to reduced demand for employment, despite the ramp-up in lumber production. In Southwestern Oregon, after reaching a low in 2001 of 1.3 million board feet (MBF) harvested, volume rose to more than 1.6 MBF during the housing boom years of 2004 to 2006. Harvest volume then plunged to less than 1.1 MBF in 2009 before the region's harvest rebounded slightly in 2010. From 2002 to 2007, forest cluster employment declined between 0.3 percent and 3.5 percent.
While the forest cluster showed no employment gains during the housing boom years, the subsequent Great Recession did not spare this group of related industries, as payroll employment slipped by more than 18 percent between 2008 and 2009. From 2009 to 2010, the bleeding nearly stopped, with payroll employment down by just 1.5 percent.
Another major ingredient in the forest cluster recipe is employment in timber tract operations; forest nurseries and the gathering of forest products; logging; and support activities for forestry. Employment in this group of industries fell from 5,432 in 2001 to 4,115 in 2010, a decline of 23.5 percent. Lane County had the steepest drop, down 44.8 percent. Coos, Curry, and Josephine counties saw declines between 30 and 35 percent. Jackson County was a true outlier, with employment increasing by 14.4 percent over the decade.
The increase in log exports, especially to China, has yet to translate into much employment gain in this forest cluster component - at least through 2010. Quarterly QCEW data does show a slight increase in logging employment statewide, from the second quarter 2010 to the second quarter 2011, but only about 150 jobs across all of Oregon.
The last major ingredient in the forest cluster mix is government: state and federal forestry and logging employment. Government employment posted the largest overall decline, down 35.5 percent from 2001 to 2010. Employment declined sharply in Josephine County, down by 70.6 percent. Coos and Curry counties were also hit hard in forest cluster government cuts, down by 59.5 and 43.4 percent, respectively.
Analyzing a group of interrelated industries can shed more light on how different parts of our economy can sometimes trend together - as is the case for most of the forest cluster in the Southern Willamette Valley and Southern Oregon. The global effects of the Great Recession, along with efficiency gains through technology and modernization, impacted the forest cluster over the past decade, resulting in less employment across most counties and individual cluster components. The ingredients for a Goo-Goo Cluster include marshmallows, chocolate chips, peanuts, condensed milk, and butter. After this article, you can consider yourselves in the category of people who clearly can differentiate between an industry cluster and a Goo-Goo Cluster.