FREDERICTON — The Atlantic forestry industry will get worse before it gets better. That’s the opinion of Atlantic Provinces Economic Council, which released a report this week that says there’s still more pain to come for the region’s forestry sector.

The report says the industry is becoming leaner and more competitive, but the industry hasn’t hit rock bottom yet. A weak U.S. export market, high energy costs and cheaper global competition will continue to make things tough until the transformation is complete.

The report — titled, Building Competitiveness in Atlantic Canada’s Forest Industries: A Strategy for Future Prosperity — measures the impact of global market changes on the industry and specific regional challenges facing the sector. In light of these conditions, APEC has made key recommendations to improve the competitiveness of the industry through government policy initiatives and private sector reforms.

It was carried out over the past eighteen months, a period during which the forest industry has been subject to widespread rationalization and plant closures.

"The forest industry in Atlantic Canada cannot remain as it is — a fundamental restructuring is already underway and further changes are required if the industry is to remain viable," says APEC’s President, Elizabeth Beale.

APEC recommends the creation of an Atlantic Forest Industry Task Force under the leadership of the forest industry and provincial governments, and an "Atlantic value added wood initiative which would assist smaller firms in moving up the value chain."

She said the industry can flourish if it makes changes, including the supply of more value added products.

More than 7,000 forestry jobs have been lost in Atlantic Canada, according to APEC.