Investment Activities in the Secondary Woodworking Industry

by

Matthew Bumgardner, Urs Buehlmann, and Karen Koenig

Research Forest Products Technologist (MB), Northern Research Station, U.S. Forest Service, Delaware, OH 43015; Professor (UB), Department of Sustainable Biomaterials, Virginia Tech, Blacksburg, VA 24061; Editor-in-Chief (KK), Woodworking Network, Lincolnshire, IL 60069. MB is corresponding author. To contact, call 740-368-0059 or email mbumgardner@fs.fed.us.

Abstract – The U.S. secondary woodworking industry has shown some signs of improvement after the steep losses in sales volume associated with the housing crisis that began in 2007. Employment in several sectors has begun to increase, suggesting that companies that survived the downturn are positioning to increase sales growth. It might be expected that investment plans to improve firm-level productivity or capabilities also are gaining momentum. The objective of this paper was to ascertain investment activities in the secondary woodworking industry, based on a survey of Woodworking Network magazine subscribers conducted in 2015. The survey was the latest of a six-year series that has tracked firm performance and activities annually since 2008, with an added recent focus on investment plans. Respondents provided information regarding their planned investment levels, areas in which they planned to invest, and the most important current drivers of investment decisions. While there was a general increase in planned investment levels over the next three years for larger firms (65% planned to invest more in 2015 than in 2014), a plurality of smaller firms (42%) were uncertain of their investment plans. Furthermore, in nearly every investigated category, a higher percentage of large firms indicated planned investments than did small firms. There also were some differences between small and large firms in what was driving investment decisions. The results suggested that overall investment activity might be expected to increase in the near term, but that the business environment remained somewhat uncertain for many smaller firms.