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Criterion 6 Indicator 40
Rationale
Extension and use of new and improved technology in the forest industry.
 
  This indicator measures investments in new technologies as major sources of improved productivity and efficiency in the forest industry. Forest products industries invest in new capital expenditures in order to add new and improved technologies to their capital stock. The amount of their investments may be used as an indicator of their commitment to improved productivity and efficiency.

Can This Indicator Be Quantified
 
The available data on new capital expenditures is not broken down into types of capital, and therefore these expenditures may overstate the amount of investment in new or improved technology.
 
Nationally, the forest products industry has invested millions of dollars to research and develop more resource-efficient wood products. Manufactured wood building products, commonly called "engineered wood," use less and lower quality wood fiber in the manufacture of wood products. Hence, engineered wood represents the convergence of technology and conservation. Plywood, oriented strand board, glue-laminated beams, wood I-beams, and laminated veneer are all examples of engineered wood product innovations that make more efficient use of wood.
 
Structural timbers and large dimension lumber that can only be manufactured from large, old growth timber have given way to engineered wood products made from smaller, faster growing second and third growth forests. Some engineered wood products are made from wood scraps that mills historically were unable to use, including waste products that were burned in open-air burners or dumped into landfills.
 
The forest products industry has also invested millions of dollars in new mill technology, in order to increase the amount of wood recovered from each log. Modern mills, equipped with computer and laser technology and thinner saw blades, are far more efficient than mills using older technology.
 
Examples of engineered wood include:
 
Plywood — Plywood is the original structural wood panel. It was introduced nearly a century ago and gained wide acceptance during the post-World War II housing boom. It is composed of thin sheets of veneer, or plies, arranged in layers to form a panel. Plywood manufacturing technology increased the amount of wood that could be cut from a single log by about 50 percent.
 
Oriented strand lumber (OSL) — This product is made from flaked strands of wood laid in directions (oriented) that maximize strength. OSL is assembled in large mats or "billets" that can then be cut into many different dimensions, depending on the intended use. Common uses include wall studs, beams, joists, and door and window frames.
 
Laminated veneer lumber (LVL) — LVL is widely used as lumber. It is made by bonding thin wood veneers with the grain of all veneers running parallel. LVL can be assembled in billets 6 feet wide and 60 feet long.
 
Oriented strand board (OSB) — OSB is manufactured in a cross-oriented pattern similar to plywood, in order to create a strong, stiff, structural panel that can be cut into many different sizes and thicknesses. This product is composed of thin, rectangular wood strands arranged in layers at right angles to one another, which are laid up into mats that form a panel. OSB is bonded with waterproof adhesives. OSB uses the wood resource very efficiently, in part because panels can be made using smaller, younger, fast-growing tree species such as aspen or pine.
 
Wood I-beams — This product is used mainly in flooring systems. The beams save time for builders, and they are dimensionally stable and lightweight. Top and bottom strips called "flanges" are made from laminated veneer lumber, and the center piece, called the "web," is made from oriented strand board or plywood. Wood I-beams use up to 50 percent less wood fiber than conventional lumber joists, allowing more efficient use of natural resources.
 
Glulam beams — These beams are produced by gluing dimensional lumber into long, shaped, structural beams used for supporting spans in buildings such as auditoriums and stadiums, and for bridges. Glulam beams take the place of steel, require less energy for manufacture, and are more aesthetically pleasing.
 

Trends
Capital investment in new technology has increased from around $200 million per year in the early 1980s to over $350 million per year in 1995. During the early 1990s investment declined from its peak of over $450 million per year to just over $300 million per year. Investment has increased steadily since then. Manufacturers of wood products continue to research and develop products that use wood as efficiently as possible in order to reduce waste and provide better products at a lower cost.  
Figure 40-1. New capital expenditures in SIC 24 and 26, from 1972-95
 
 
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Data Source and Availability
   
The data used came from the Annual Survey of Manufacturers, a report produced annually by the U.S. Bureau of the Census. Information may be missing for some years because census data were not taken.
 

Reliability of Data
   
Census Bureau data is very reliable.

Scale
   
Data on new capital expenditures are presented in the Annual Survey of Manufacturers by industry, at both the national and state level.

Recommended Action for Data Collection
   
None.

Definitions
 
SIC 24 — This standard industrial classification code covers all industries manufacturing lumber and wood products, except furniture. This group includes establishments engaged in cutting timber and pulpwood, merchant sawmills, lath mills, shingle mills, cooperage stock mills, planing mills, and plywood and veneer mills that produce lumber and wood basic materials; and establishments engaged in manufacturing finished articles made entirely or mainly of wood or related materials.
 
SIC 26 — This standard industrial classification code covers all industries manufacturing paper and allied products. This group includes establishments primarily engaged in the manufacture of pulps from wood, other cellulose fibers, and rags; the manufacture of paper and paperboard; and the manufacture of paper and paperboard into converted products, such as coated paper, paper bags, paper boxes, and envelopes. Also included are establishments primarily engaged in manufacturing bags of plastic films and sheets.
 

Selected References
APA - The Engineered Wood Association. Web site address: http://www.apawood.org/.
 
Evergreen Magazine. December 1996 issue.
 
Annual Survey of Manufacturers. Geographic Area Statistics for the US by Industry Group. U.S. Department of Commerce Economics and Statistics Administration. Bureau of the Census. Web site addresses:
 
http://www.census.gov/prod/www/abs/geograph.html
http://www.census.gov/prod/www/abs/manu-min.html