KALISPELL - Montana's timber business - along with that of the entire continent - has been, in a word,"decimated." Patrick Barkey chose that word. Others

have chosen different words. "Hammered" is one. "Wiped out" is another description. "It's been in total free-fall," Todd Morgan said.

Morgan and Barkey track the wood products industry from the University of Montana offices of the Bureau of Business and Economic Research.

The global recession was built on a housing collapse, and housing is built of wood, and lumber producers have seen demand for their boards more than decimated.

The Western Wood Products Association estimates that 45 percent of all lumber goes to new home construction. But new home starts have been more than halved since reaching a high of more than 2 million in 2005. Since that year, the nation's demand for lumber has dropped 55 percent, the steepest decline in industry history.

"It hasn't been pretty," Morgan said.

Mills have cut wages, curtailed shifts, even closed permanently, as lumber production has been slashed in response to falling demand.Timber harvest likewise has dropped to levels not seen since 1946.

"Whether or not Montana's forest products industry can once again thrive depends on two key factors: its ability to ride out the current situation,and local timber availability when market conditions eventually improve," says a BBER report.

Slow going

As to the first, analysts at the Western Wood Products Association and elsewhere are predicting a slow recovery starting in 2010, with housing starts pushing past the half-million mark. But they predict that it will be years before housing starts hit 1 million - which is still half the pre-recession level.

National demand for lumber, which pegged 64.3 billion board feet in 2005, is predicted to fall below 30 billion board feet this year, with the amount of lumber used to build new homes dropping from 28 billion board feet to about 5 billion board feet. Making matters worse is the fact that log prices have not fallen at the same rate, meaning mills are paying more for raw materials while selling product for less.

"The margins just keep getting thinner and thinner," Morgan said.He added that "the predictions are that 2009 will be as bad, or slightly worse,than 2008 was."

Any recovery in 2010, he said, "is going to be very,very slow and incremental."

Demand for other wood products - such as paper and cardboard - has also dropped, as consumers aren't buying packaged goods.

The good news, if it can be called that, is that operations now are running so lean that any uptick should be felt immediately in terms of work force numbers.

Around the state

Eastern Montana: This area is known as a source of ponderosa pine, used as pulp wood. Jason Todhunter, at the Montana Logging Association, said that after several solid pulp years, the recession has now hit that industry as well.

The survival of timber in Eastern Montana, he said, relies on the success of firms such as Smurfit-Stone Container Corp., which has a linerboard plant in Western Montana and is the state's biggest user of pulp wood. "Is Smurfit going to be there in the future?" he wondered."That's the million- dollar question for Eastern Montana."

North-central Montana: Large swaths of beetle-killed forests are keeping loggers at work, Todhunter said, despite flagging product demand. Many private landowners - who normally wouldn't sell logs at a time of low stumpage prices - are busily logging forests to stop the spread of beetles. "That's what's keeping people going in and around towns like Helena," Todhunter said. "The forest health work needs to be done, even if the market for the wood isn't there."

South-central Montana: Logging and milling have slowed in the Bozeman area just as they have elsewhere in the state, Todhunter said, but could rebound quickly if the local housing market strengthens. The area is home to several niche and specialty mills, producing specific products such as flooring, siding and reclaimed lumber.

In addition, several log home builders work in the region. A return of local construction would mean immediate employment for those specialists, he said.

Northwest Montana: Long a stronghold for the timber industry, northwest Montana has borne the brunt of the downturn. Mill owners have cut wages, curtailed shifts and even closed mills permanently. The closures mean some lost jobs never will return, Barkey said. "Everybody up there is in survival

mode," Todhunter said. A rebound will require a strong national housing market, low interest rates, a good supply of logs and a public demanding wood as a "green" building material, he predicted.