Michigan’s forest sector lost $211.55 million in output and around 1,100 jobs between 2019 and 2023 as a result of sawmill closures and reduced timber processing activity. Only 273 of these job losses occurred directly within sawmills, while the remaining 820 were indirect, mostly hitting logging, transportation, wholesale, real estate, and finance sectors. The economic impact stemmed from the central role sawmills play in the state’s timber supply chain, which makes up more than 80% of Michigan’s wood-processing facilities, according to research by Basanta Lamsal, Jagdish Poudel, and Raju Pokharel of Michigan State University and the Michigan Department of Natural Resources.
The study identifies multiple structural and operational causes behind the losses. The number of sawmills declined from 257 to 237 during the five-year period, including a drop in large mills from 48 to 35. Small sawmills also fell, from 132 to 121. The shift reflects a long-term trend, as the total sawmill count has decreased by 31% since 1990. Meanwhile, total annual roundwood receipts dropped by 27% between 2018 and 2023 alone, declining from 131,773 to 106,911 cubic feet. This reduction in timber demand weakened the financial viability of logging operations and forestland management across the state.
Loggers and mill operators cited mutual challenges that exacerbated disruptions. Sawmill owners reported shortages of logging contractors and rising procurement costs, while loggers said they struggled to secure fair compensation, pointing to pricing asymmetries within the supply chain. These tensions added pressure to an already strained sector. In addition, unexpected shutdowns—such as a fire near Marion that halted operations—exposed the vulnerability of rural regions reliant on mill infrastructure.
Although some modernization occurred, such as Precision Hardwood’s $12 million mill investment and Wilson Enterprises’ expansion into industrial sawmilling, these new capacities did not offset the closures of facilities like the two Besse Forest Products Group mills in the Upper Peninsula, which led to over 100 layoffs alone.
The authors emphasize that mill closures function as systemic shocks, not isolated events, with two-thirds of job losses occurring outside the sawmills themselves. The results support policy interventions focused on upgrading mill infrastructure, strengthening supplier linkages, and providing targeted support to displaced workers and vulnerable regions.
