Paper is used in a broad array of products essential for everyday life. From newspapers, books, and magazines; and printing and writing papers to cardboard boxes and bags; and paper towels and napkins, sanitary tissues, and disposable diapers—we are daily surrounded by paper products. Paper is also used in a broad spectrum of industrial applications. The food processing industry is a major paper customer; and there are paper fibers in film, rayon, and part of the space shuttle’s nose cone.

Per capita consumption of paper is a widely used barometer of economic advancement. As a country’s gross domestic product grows, so does its demand for paper. Growth patterns in paper products such as newsprint and office and computer papers are closely related to industrial activity, while other products (e.g., disposable diapers) are directly affected by changes in real personal income or demographic factors. The United States is the world’s leading economy and the world’s largest consumer of paper and paperboard products—our per capita consumption is roughly 700 pounds annually.

The United States is also the world’s leading producer of paper, and its immense production volume reflects the size and wealth of the domestic market, and the relative abundance and low cost of raw materials and other crucial inputs. Although year-to-year fluctuations occur, the industry has been relatively free from the cyclical volatility experienced by such primary industries as mining, metals, and wood products. The pulp and paper industry has been called a bellwether for the national economy.

The relative abundance and low cost of raw materials and other crucial inputs (e.g., wood, energy, water) has made Washington State a leader in the nation’s pulp and paper industry. The first paper mill on the West Coast was built in 1883 near Camus, Washington. The mill, financed by H.L. Pittock, the founder of the Oregonian newspaper, had a daily capacity of 6 tons of newsprint. The expansion of the state’s infant pulp and paper industry was initially stunted by Washington’s distance from Eastern markets. Consequently, production at this and other early pulp and paper mills was largely oriented toward meeting the regional demand for newsprint.

During the interwar years, the national pulp and paper industry experienced spectacular growth, fueled by increased consumer demand and significant product and process developments. In Washington State, 15 new facilities were built and by 1939 pulp production jumped from 134,000 tons to 1.4 million tons a year. Newsprint and packaging papers still dominated the state’s product portfolio, however, increased demand for paper grades made from sulfite pulp resulted in a growing supply of rayon, cellophane, and white paper. Over the next fifty years, the Washington State pulp and paper industry grew steadily, making it an increasingly important component of the state’s economy.

Figure 1

Employment in Washington Pulp & Paper, 1947-1998
Source: Washington Employment Security Department

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In recent years, many of the same forces affecting the state’s lumber and wood products industry have applied to the pulp and paper industry. For instance, the 1990-91 recession not only softened demand for paper, but also resulted in a smaller supply of wood chips—the chief ingredient for pulp, as Washington’s sawmills curtailed production. The rising cost of chips, coupled with stable paper prices, damaged the state industry’s competitiveness and cut deeply into profits. Environmental laws have also affected pulp and paper’s processing and limits placed on timber harvesting have similarly affected wood chip supply.

The last few years have been especially difficult for the Washington pulp and paper industry. With increased worldwide capacity and sluggish demand, paper prices plummeted. Although state pulp and paper manufacturers have survived the latest downside of the industry business cycle, some plants have closed including specialty pulp mills in Port Angeles and Vancouver.

Figure 2

Number of Pulp & Paper Establishments in Washington, 1981-1998
Source: Washington Employment Security Department

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The pulp & paper industry in Washington is largely composed of large mills and plants that produce pulp, paper, paperboard, containers, and converted paper products. Three of the subsectors (pulp mills, paper mills, and paperboard mills) account for about one-third of the total 141 establishments, averaging 220 workers per establishment. By contrast, paperboard containers and boxes (e.g., corrugated and solid fiber boxes, sanitary food containers, folding paperboard boxes) and miscellaneous converted paper products (coated and laminated paper, bags, envelopes) subsectors averages 63 employees per establishment. Nearly 70 percent of all pulp & paper workers are found in establishments with 500 or more employees.  

Figure 3

Size of Establishments of Washington Pulp & Paper Industry, 1998
Source: Washington Employment Security Department

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Structure of the Pulp and Paper Industry

Significance of Pulp and Paper to the Washington State Economy