Timber has traditionally been a far more significant component of the rural economy than it is now. The critical determining factor in the economic return for woodland management is the quality of material coming out of the woodland. Unfortunately, due to low timber prices, many woodlands have been left unmanaged, this has reduced the quality of timber available, which in turn has reduced the timber value, and so on.

The advantage of producing fuel from forestry material is that it is not dependent on timber quality. This has the potential to provide a market for material from forestry thinning and other trees with either low diameter or poor form. Thinning is an essential tool in effective woodland management to produce higher grade timber for premium markets. A growing market for poor quality timber could allow the forestry industry to manage a much greater area of woodland; this would increase the number of rural jobs in addition to developing the environmental and social benefits associated with woodland management.

Forestry and timber businesses already make a significant contribution to UK productivity

The UK’s forestry and timber businesses represented 0.5% of GVA in 2008, or £6.4 billion (according to the Office for National Statistics 2009 Annual Business Inquiry), and employing 155,000 people.
Looking at specific sectors:

• Forestry and logging contributed £472 million of GVA, and employed 12,000 workers
• Wood product manufacturing contributed £3.1 billion of GVA, and employed 79,000 workers
• Paper and paper product manufacturing contributed £2.8 billion of GVA, and employed 64,000 workers

When indirect contributions to the economy are taken into consideration, forestry and primary processing businesses employed 560,000 workers and made a £19.3 billion contribution to GVA according to the Centre for Economics and Business Research and the woodfuel industry alone is expected to create an additional 15,000 jobs by 2020 (up from 5,500 jobs in 2008) and add £1.24 billion of GVA to the UK economy. There are significant further economic benefits derived from the wider forest industries, e.g. forest related tourism. For example, in 2008 the total employment due to, and direct spending from, woodland tourism and recreation in Scotland is estimated to be around 17,900 FTE jobs and £209m.