Modelling wood processing options for New Zealand: Economic impact analysis

Authors: Luke Barry, Peter Hall
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2013, Issue N.Z.J.For. 58(4) 2014, pp 31-37, Jan 2014
Publisher: New Zealand Institute of Forestry

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Abstract: A national-level financial model was used in the WoodScape study to analyse the potential of a range of traditional and emerging wood processing technologies. The model inputs industry sourced techno-economic data on wood processing options and macroeconomic impacts from across New Zealand and, where necessary, the rest of the world to assess the increase in GDP, employment and export earnings from processing wood harvested in this country. This identified a number of traditional and emerging technologies, which offer potentially significant increases for both the individual firm and the wider economy. The WoodScape modelling shows that GDP could increase by almost NZ$1.1 billion per annum, almost 4,500 extra jobs could be created, and export earnings could rise by an estimated NZ$2 billion. This was estimated by applying a conservative average increase in GDP, employment and export earnings across WoodScape technologies from onshore processing of an extra 11 million cubic metres of typically exported logs. Increased wood processing has an important role in New Zealand’s economic growth. The WoodScape study found that most wood processing options can make a significant contribution to GDP. A number of the options also look attractive for investment based on their return on capital (>20 per cent), cash flow and the market opportunity for their products. Several wood processing options show a labour productivity greater than $200 per hour of employment, comparable to the highest performing sectors of the economy.

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