Kentucky’s forests continue to support a large forest industry while also providing countless ecosystem benefits to the state. This report estimates the economic contribution of the overall forest sector in rural and urban areas. Since 2015, the overall Kentucky forest sector has remained fairly stable ranging from $8.4 billion in direct contributions to an estimated $9.2 billion in 2018. We estimate that the direct economic contribution of the Kentucky forest sector in 2019 was $9.1 billion while the total economic contribution was $13.2 billion (Figure 1). The Kentucky forest sector also directly employed nearly 28,000 people in 2019. When indirect and induced employment are also included the total employment numbers are more than 53,000 (Figure 2). The direct labor wages for the Kentucky forest sector were $1.7 billion in 2019 with total labor wages reaching nearly $3 billion. The COVID-19 pandemic has created many hardships in 2020 for numerous industries including the Kentucky forest industry. While some economists anticipate a quick recovery much uncertainty remains.

   

To estimate economic contribution in 2019, the 2018 economic data was adjusted based on input from forest industry companies in Kentucky. Three sub-sectors experienced major changes in 2019 (Table 1). Logging and primary wood manufacturing were negatively impacted by a diminishing demand for red oak and other species for export and a slowing Chinese economy. The pulp & paper sub-sector saw increases of over 5.5% from 2018 as additional capacity came online with the opening of the paper facility in western Kentucky.