Economic Impact

Maine’s pulp & paper industry is referred to as the backbone of the States’ economy…and for good reason. The industry comprises about 4.1% ($1.477 billion) of Maine’s Gross State Product. The pulp and paper industry is also the largest manufacturing industry in Maine.

Capital Investment

The pulp & paper industry is very capital-intensive. Maine pulp & paper companies compete with countries from all over the globe including Europe, Asia, Canada and South America. To stay viable in today’s competitive marketplace, a mill must continually invest in equipment to keep up it’s rate of production. Capital investment is a life or death scenario for a pulp & paper mill. Most paper mills compete with other mills owned by their parent corporations for investment dollars to improve facilities in state. Since companies have locations across the U.S. and the world, financial resources are generally allocated according to need and where the company will get the best rate of return on it’s investments. Mills that are in states that are business friendly often receive more of these limited investment dollars. In addition, it is imperative that Maine employees be able to compete as well. This means allowing Maine employees to use the latest technology available to do their jobs. That is why it is important that Maine stay competitive with other states. If a mill cannot attract capital investment, the mill eventually falls behind in competitiveness and the rate at which it turns out product falls behind other mills around the country and the world. So, investment is key.

Direct and Indirect Economic Impact

Overall, the pulp and paper industry has a substantial direct and indirect impact on state and local economies. In 2004, Maine’s pulp & paper mills spent approximately $898,000,000 statewide on goods and services. Maine paper companies also spent approximately $292,000,000 on goods and services within a 60 miles radius of each mill. The companies are critical to the local economy in a mill town. In many cases, the mills comprise 60%-80% of the property tax base in those towns. Many local vendors and shops also realize the obvious indirect benefits of having a mill in their town. Investments made in new equipment also help to retain jobs for Maine families. As of 2004, the pulp & paper industry one of the largest manufacturing employers in the state, with 15.8% of the manufacturing workforce or 9,940 jobs. In total, the pulp & paper industry accounts for 22% of all manufacturing wages in the state. In 2004, the industry paid out approximately $593,723,680 in total wages. That year, total direct and indirect wages attributed to the industry were approximately $1,389,313,411. Pulp & paper industry workers are paid the highest reported manufacturing average wage in the state at $58,136.

As always, the pulp & paper industry continues to be a major sustaining force in Maine’s economy, providing well paying jobs that support thousands of Maine families.