Despite ongoing industry-wide struggles, forestry workers enjoyed the greatest increase in wages during the last year compared with every other sector in B.C.
According to Statistics Canada, average earnings for forestry, logging and support workers in B.C. jumped 14.5% to $1,235 per week between September 2010 and 2011.
Although they�re not the highest paid workers in B.C. (that title goes to utilities workers at $1,713 per week), the next highest increase in wages came from information and cultural industries, where average weekly earnings increased 9% to $1,102.
Bruce McIntyre, PwC�s B.C.-based forest, paper and packaging expert, said the increase was the result of a strong year in 2010 for western Canadian pulp and lumber manufacturers.
�There was a good turnaround in the industry [compared with] 2009, globally, and really a lot of the reason for that is a general uptick in markets, particularly in the Asian markets,� said McIntyre. �Really the strength is in the pulp sector, that�s where the pricing has been quite strong over the past year or two.�
The combined net earnings of the top 11 forest and paper companies in Canada swung to a profit of US$3.3 billion last year compared with a $2 billion loss in 2009, PwC reported last month.
In Nanaimo, the Harmac Pacific pulp mill enjoyed pulp prices upward of $1,000 per tonne earlier in the year, said president Levi Sampson.
That helped the mill issue its first dividend cheques to employees this month, three years after it was rescued from bankruptcy with an employee-ownership model.
Sampson said each of the mill�s 300-plus workers received cheques that averaged more than $2,000 – proof, he said, that the employee-ownership model can turn a money-loser into a money-maker.
�This was a huge, huge day for our company,� said Sampson. �Last week, I was fired up and emotional to get to the point where we�re giving out cheques to all of our employees right before Christmas.�
Curtis Spencer, a bleach plant assistant who has worked at Harmac for 35 years, said the cheque was nice, but his co-workers are happier still that the mill is up and running.
�It�s not so much the cheque and the money, it�s being here and being able to receive it,� said Spencer. �Being a part of that business success is huge.�
But the good times B.C.�s forestry companies enjoyed last year have been brief.
Already, pulp prices have dropped as economies worldwide gear down from a short-lived post-recession boom.
Richmond�s Catalyst Paper (TSX:CTL) said in November reduced global paper demand and higher inventory levels led to a 8.7% decrease in the average pulp price in China compared with the second quarter.
Canfor Pulp, which operates three mills in Prince George, also said its share of operating earnings in the third quarter was down $6.7 million due to lower pulp prices and production volumes.
Sampson believes the dive the market took during the last six months will be short lived.
�Right now we�re really at the bottom of the market,� he said. �I expect it will pick up some time in Q1. I think it was pretty surprising to people we would be issuing a dividend in the middle of this low pulp market.�
B.C.�s lumber producers are also facing renewed challenges.
Canfor�s (TSX:CFP) lumber business reported an operating loss of $11.7 million in the third quarter as the U.S. housing market continued to struggle.
West Fraser Timber�s (TSX:WFT) lumber segment posted an operating loss of $15 million in the third quarter.
Conifex Timber (TSX-V:CFF), a relatively new player to the B.C. lumber scene, said during its third quarter conference call that it hoped to ship more lumber to Japan in the future as the market for low-grade lumber in China continued to deteriorate.
Russ Taylor, president of International WOOD Markets Group in Vancouver, said China, which was a huge growth market for B.C. in 2010 and the early part of 2011, has fallen off somewhat in recent months due to a housing market correction.
�We think it�s going to take until the end of the first quarter or early second quarter until China gets back to buying again,� said Taylor.
Meantime, the U.S. market remains �as flat as a pancake,� he said, adding that the companies that will perform well in 2012 will be low-cost producers who diversify their end markets and products as much as possible.
�You can�t now rely on the U.S., you can�t rely on China – you need to have a little more product diversification.���
