BANGOR (AP) – Mill operators say a labor shortage exacerbated by an increase in new housing construction is chief among the reasons why Maine mills are suffering from a lack of supply.

When Louisiana-Pacific shut down its mill in Baileyville in eastern Maine earlier this month, many Mainers were asking this: How could a mill in a state thick with timber be starved for logs?

Industry experts say one place to look is the surge in new housing this year, which caused increased demand for Maine’s timber and competition among the state’s mills.

But when those mills called for more raw material, they found a shrunken logging force and logging contractors unwilling to bulk up for a surge. Those in the industry say a long-standing reserve of part-time loggers, traditionally willing to shore up supply when markets got tight, was no longer answering the call.

The end result was too few strong backs available to harvest Maine’s trees.

“The guy that is working one man and a skidder, a lot of those have parked the skidder and gone to work in construction and other things,” said Carl Henderson, a land management forester with James W. Sewall Co. “There is enough logging capacity out there to keep the big land owners going at the level that they want to cut, but there is no surge capacity for when these mills need extra wood.”

Louisiana-Pacific earlier this month announced it was laying off 99 employees at its Baileyville mill near Calais, where the company made what is called oriented strand board, which is popular in home construction. Company officials blamed a shortage of logs for the shutdown.

A labor shortage is hard to grasp in parts of Maine where unemployment is typically among the highest in the state.

But Labor Department figures show that logging industry jobs, including truckers, held steady at around 2,600 from 1993 through 2001, but fell to 2,400 last year.

Industry officials said the thin logging force was already committed to contracts with other mills, including the Fraser Paper mill in Berlin, N.H., that reopened last year.

A growing number of logs are also making their way to Canada for processing. Thirty-eight percent of saw logs cut in Maine in 2002 were shipped to Canada, up from 28 percent in 1999.

Daniel Dructor, executive vice president of the American Loggers Council, based in Texas, said the timber industry also suffers from global competition and rising insurance, equipment and fuel costs.

He said 119 U.S. mills shut down between 1996 and 2002 – 56 of them in 2001 and 2002.

“It’s just poor returns,” Dructor said. “The average guy has a million and a half dollars invested, and why invest in a logging business that is only going to make you 10 grand when you can invest in a mutual fund, without all the headaches, and make $90,000?”

AP-ES-12-28-03 1315EST