Economic Impact of the COVID-19 Pandemic on Tennessee Forest Product Exports

Andrew Muhammad, Chad M. Hellwinckel, Ejimofor Anosike and Adam Taylor

No 319769, Extension Reports from University of Tennessee, Department of Agricultural and Resource Economics

Abstract: In 2020, the COVID-19 pandemic spread across the globe and had severe impacts on the global economy. As the pandemic began to spread across the U.S., businesses closed and individuals were asked to comply with shelter-in- place and stay-at-home orders (Baker et al., 2020). Countries around the globe imposed similar measures, which negatively affected the global economy beyond anything experienced in nearly a century (Jackson et al., 2020; Sarkodie and Owusu, 2021). Consequently, the pandemic had a negative impact on U.S. forestry exports at the national and state level. Lower global economic activity and disruptions to transportation networks decreased international timber trade. Early in the pandemic, foreign ports were closed, which curtailed timber shipments, and worldwide shutdowns in construction and manufacturing weakened international demand for logs, lumber and other forest products (Riddle, 2020). In this report, we assess the impact of the COVID-19 pandemic on Tennessee forest product exports. We examine export losses in 2020 by destination countries and forest product category and further assess the full economic impact of decreased export sales on income and jobs at the state and county level. According to Muhammad and Taylor (2020), the COVID-19 pandemic had a significant impact on Tennessee’s forest product exports in 2020 due to supply and demand disruptions in the global market for finished wood products markets (e.g., furniture) and the interrelated market for raw materials and inputs (e.g., logs and lumber). In 2020, U.S. forest-product exports were down by more than $670 million when compared to the previous year. Geographically, the decline in export sales was mostly in southern states ($240 million), followed by western states ($217 million). Losses in 2020 were in addition to losses in 2019, due to the trade war between the U.S. and China. In 2020, the decrease in export sales for Tennessee was $38 million. Given the state’s dependence on foreign export sales of hardwoods, losses for Tennessee in percentage terms (22 percent in 2020 and 46 percent since 2018) exceeded national and regional averages (see Table 1) (USDA-FAS, 2021). The impacts of the trade war on U.S. and Tennessee forest product exports have been discussed in previous UT Extension reports (Muhammad and Taylor, 2020; Muhammad and Smith, 2020). The analysis in this report is based on the decrease in export sales in 2020, which has been mostly attributed to the pandemic (Riddle, 2020).

Keywords: Community/Rural/Urban Development; International Relations/Trade; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 10
Date: 2022-02-01
New Economics Papers: this item is included in nep-ban, nep-env and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:utaeer:319769

DOI: 10.22004/ag.econ.319769

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