
Figure 1. Number of full-and part-time sawmill employment in Wisconsin, 2015-2023. Data Source: IMPLAN. / Graphic Credit: Ram Dahal, Wisconsin DNR
By Ram Dahal, DNR Forest Economist, Madison
Ram.Dahal@wisconsin.gov
Residential home construction heavily depends on wood products like lumber. When housing starts increase, the demand for softwood and hardwood lumber and engineered wood products typically rises, and vice versa.
The home building market experienced a variety of challenges in recent years due to stay-at-home orders during the COVID-19 pandemic. In the second quarter of 2020, the US experienced a reduction of more than 25% in new privately owned housing starts compared to the previous quarter. Almost all regions experienced similar downfall (Figure 1).

Figure 2. New Privately Owned Housing Units Started, Total Units. Data retrieved from FRED (Federal Reserve Bank of St. Louis). / Graphic Credit: Ram Dahal, Wisconsin DNR
After 2020-Q2, the industry began to recover, but as interest rates surged after 2022-Q1 (Figure 2), construction of new homes quickly began to slow down.
With the residential home construction business facing ups and downs in recent years, residential construction’s labor market also experienced substantial impact. For example, Wisconsin’s new residential construction (total) experienced around 4% reduction in employment numbers between 2019 and 2021. New single-family residential construction business alone experienced 6.5% job loss during the same period.
However, the construction job market has started to rebound after 2022 (Figure 3). Declining housing starts also had similar negative impact to sawmill industry in Wisconsin.
The industry lost around 15% of jobs between 2019 and 2021, before the industry started to recover (Figure 4).

Figure 3. The 30-year fixed rate mortgage average in the United States. Data retrieved from FRED (Federal Reserve Bank of St. Louis). / Graphic Credit: Ram Dahal, Wisconsin DNR

Figure 4. Number of full-and part-time sawmill employment in Wisconsin, 2015-2023. Data Source: IMPLAN. / Graphic Credit: Ram Dahal, Wisconsin DNR