Michigan’s forest industry has taken a major hit in recent years, losing more than $211 million in output and 1,100 jobs between 2019 and 2023. That is according to a new study, published by Michigan State University and the Department of Natural Resources, which attributes the downturn to widespread sawmill closures and a steep decline in timber processing. “These are not isolated events,” said researchers Basanta Lamsal, Jagdish Poudel, and Raju Pokharel. “They disrupt entire regional economies and labour markets.”
“This study investigates the impact of sawmill entry and exits in Michigan between 2019 and 2023,” the authors explained, “including the closure of several large mills and the opening of smaller or mid-sized operations,” they said. “The results show that while only 273 direct jobs were lost… the broader ripple effects were much larger—approximately 820 jobs and $211 million in losses.”
The losses were felt most acutely in labour-intensive and downstream sectors such as logging, transportation, wholesale trade, and real estate. “Two-thirds of job losses occurred outside the mills themselves,” the researchers said. “These effects were most pronounced in sectors such as logging and transportation, as well as downstream industries.”
By the numbers, Michigan’s sawmill count declined from 257 to 237 during the study period. Larger mills dropped from 48 to 35, and smaller mills from 132 to 121. The trend reflects a long-term contraction—since 1990, the state has lost 31% of its sawmills. Timber demand also fell sharply, with roundwood receipts down 27% between 2018 and 2023. “We’re seeing a breakdown in the supply chain,” said one mill operator. “Loggers can’t get fair compensation, and mills can’t find reliable contractors.”
Sawmill owners cited shortages of logging contractors and rising procurement costs. Loggers, meanwhile, pointed to pricing asymmetries that made operations financially unsustainable. The strain was compounded by unexpected disruptions, including a fire near Marion that halted production and exposed the vulnerability of rural economies dependent on mill infrastructure.
Modernisation efforts—such as Precision Hardwood’s $12 million investment and Wilson Enterprises’ expansion into industrial sawmilling—offered some relief, but failed to offset the damage. The closure of two Besse Forest Products Group mills in the Upper Peninsula alone resulted in more than 100 layoffs. “Our findings support upgrading mill infrastructure, strengthening supplier linkages, and providing support to displaced workers and vulnerable regions,” the authors said.
For more information: Basanta Lamsal, Jagdish Poudel, Raju Pokharel, Regional economic and employment impacts of industrial decline in the forest sector: Evidence from sawmill closures in Michigan, Forest Policy and Economics, Volume 178, 2025, 103601, ISSN 1389-9341, doi.org/10.1016/j.forpol.2025.103601.
