The Forestry Contracting Association (FCA) met all its agreed targets in 2001 but suffered a financial loss for the first time in nine years.
The targets were met despite difficult industry conditions including the depressed market for round timber and the foot and mouth outbreak.
The FCA says the majority of contractors survived by reducing costs and increasing output but warned that any further deterioration of conditions will lead to more leaving the industry.
A key factor behind its losses of £110,000 on a reduced turnover of £1.1m, said the FCA, was the cancellation of or delay of projects due to the foot and mouth epidemic.
The organisation pointed out that it did fulfill goals for project completions, training courses delivered and capital grants allocated. With support from the Forestry Commission, Welsh Development Agency and Welsh European Funding Office, it now plans to implement a major project of training and business development in Wales.
The FCA also announced the opening of an office at Plas Gogerddan, Aberystwyth.