A survey determined that installed dry kiln capacity in Alaska more than doubled to an estimated 220 thousand board feet (mbf) within 4 years (2000-2004). This increased ability to produce dry lumber and value-added products resulted from industry efforts to obtain federal funding to support a dry kiln grant program. This report reviews grantees' progress in implementing grant supported projects and their impact on the production capabilities of the Alaska lumber drying industry. Data were collected in early 2005 by using a standard set of questions asked of 19 dry kiln owners. Much of the growth in drying and value-added processing capacity has been concentrated in southeast Alaska where there has been the greatest dry kiln investment. During 2004, the estimated volume of lumber dried in Alaska was 813 mbf, whereas potential annual capacity was estimated to be almost 6,600 mbf. This indicates that Alaska producers are drying just over 12 percent of their potential capacity. Factors that will increase the future production of value-added forest products in Alaska include a continuing supply of economically priced timber, the ability of the industry to support a reasonably priced grading service, and the ability of producers to move value-added products to domestic and export markets.

This report traces the flow of timber harvested in Alaska during calendar year 2005, describes the composition and operations of the state's primary forest products industry, and quantifies volumes and uses of wood fiber. Historical wood products industry changes are discussed, as well as trends in timber harvest, production, and sales of primary wood products.

This report focuses on economic trends since the 1970s in rural southeast Alaska. These trends are compared with those in the Nation and in nonmetropolitan areas of the country to determine the extent to which the economy in rural southeast Alaska is affected by regional activity and by larger market forces. Many of the economic changes occurring in rural southeast Alaska, such as the decline in the manufacturing sector, are reflections of broad-scale changes in the greater U.S. economy. Other changes, such as the increase in nonwage income as a percentage of total income, have been greater in rural southeast Alaska than at the larger scales of comparison. In chapter 1, Robertson describes these changes and their underlying causes and outlines some of their implications for the management of the Tongass National Forest. Providing forest-based recreational opportunities and aesthetic amenities is becoming increasingly important as tourism and residential activity compose a larger portion of the regions economy. In chapter 2, Crone provides a historical context for the economic changes in rural southeast Alaska. She also establishes the global context for these changes, concluding that forces at local, national, and international scales have shaped economic growth patterns in rural southeast Alaska.