Assessing the Impacts of Globalization on the Appalachian Wood Products Industry

Published Date

Research Issue

Globalization of wood products manufacturing is having dramatic effects on the domestic wood products industry.  The U.S. furniture industry in particular is facing increasing competition from low-cost regions like China, Viet Nam, and South America.  Today, over 60% of the wood household furniture sold in the United States is imported; 20 years ago, less than 5% was imported.  Employment in the U.S. wood furniture industry also has dropped dramatically as a result of globalization, with the industry having lost over half its workforce (59%) from 1999 to 2008.

Our Research

We analyze of the impact of globalization on the performance of the Appalachian forest products industry.  Our analysis is aimed at providing insight into relevant trends and developing successful strategies to mitigate this intense competition that did not exist 20 years ago.  Clearly, the old business models do not apply anymore – our analysis has identified some useful alternatives that focus less on commodity furniture, and place more emphasis on value-added products and services.  One example is the Amish-based furniture manufacturing clusters located in Ohio, Indiana, Pennsylvania, and elsewhere.  By manufacturing high quality and customized products using well-defined supply chains, this industry segment has grown during a period of overall furniture industry decline.  There are over 400 furniture shops employing about 2,700 people in the Ohio-based Amish furniture cluster alone, consuming nearly 43 million board feet of hardwood lumber per year.

 Expected Outcomes

We seek to help wood products manufacturers in the United States to sustain their competitive position in the global economy.  This helps maintain and create jobs, often in rural communities, and helps provide the economic incentives necessary to sustainably manage U.S. forests.  We will identify competitive actions that can be taken by domestic firms and assess the competitive positions of different segments of the wood products industry.  This information and analysis helps companies to develop strategies to mitigate problems and capitalize on opportunities in domestic and export markets, and helps policy-makers understand opportunities for local and regional economic development.

Research Results

Bowe, S., M. Bumgardner, and T. Mace. 2008. Opportunities and challenges for the export of U.S. value-added wood products to China. Gen. Tech. Rep. NRS-35. Newtown Square, PA: U.S. Department of Agriculture, Forest Service, Northern Research Station. 28 p.

Luppold, W.G. and M.S. Bumgardner. 2008. The two eras of globalization and hardwood sawtimber demand. In Proceedings of the 2006 Southern Forest Economics Workers (SOFEW). March 23-24, 2006. Knoxville, TN. pages 125-133.

Bumgardner, M., R. Romig, and W. Luppold. 2007. Wood use by Ohio's Amish furniture cluster. Forest Products Journal. 57(12):6-12. 

Buehlmann,U, M. Bumgardner, A.Schuler, and M. Barford. 2007. Assessing the Impacts of Global Competition on the Appalachian Hardwood Industry. Forest Products Journal.  57(3):89-93.
Ince, Peter, A. Schuler, H. Spelter, and B. Luppold. 2007. Globalization and Structural change in the U.S. Forest Sector: an Evolving Context for Sustainable Forest Management. FPL–GTR–170.

Buehlmann, U., M. Bumgardner, T. Lihra, and M. Frye. 2006.  Attitudes of U.S. retailers toward China, Canada, and the United States as manufacturing sources for furniture: an assessment of competitive priorities. Journal of Global Marketing. 20(1):61-73.

Bumgardner, M., U. Buehlmann, A. Schuler, and R. Christianson. 2004. Domestic competitiveness in secondary wood industries. Forest Products Journal. 54(10):21-28.

Schuler, A. and U. Buehlmann. 2003. Identifying Future Competitive Business Strategies fro the U.S. Residential Wood Furniture Industry: Benchmarking and Paradigm Shifts.  GTR-NE–304.

Research Participants

Principal Investigators

• Matt Bumgardner, USDA-Forest Service Northern Research Station - Research Forest Products Technologist
• Al Schuler, USDA-Forest Service Northern Research Station - Research Forester

Research Partners

• Bill Luppold, USDA-Forest Service Northern Research Station
• Urs Buehlmann, Virginia Tech
• Robert Romig, Gary Graham, and Charles Goebel, Ohio State University
• Scott Bowe, University of Wisconsin-Madison 

Last Modified: 11/10/2009

For further details log on website :
http://www.nrs.fs.fed.us/sustaining_forests/monitoring_assessment/appalachian_globalization/