The forest industry is of major importance in the economy of Newfoundland. However, its contribution in absolute terms has declined slightly, and in relative terms considerably, since 1951.A major problem of the industry is low productivity in woodswork and in sawmill operations, in which annual earnings are very meagre. Increased mechanization is called for, as well as rationalization of the pattern of forest holdings and the procedures of sawlog procurement. The establishment of a full-time logger force will also be beneficial.A future expansion of the forest industry of Newfoundland may be foreseen. This could involve both an expansion of production at the existing pulp and paper mills and the establishment of one or two additional mills.