The carpet-maker Cavalier Corporation has confirmed a significant drop in carpet sales which has led to job layoffs and production cuts at processing plants in New Zealand.
Cavalier says sales of broadloom carpet and carpet tiles for the first quarter (to the end of September) are down by about 20% on the previous year.
The company says economic uncertainties arising from the financial crisis in Europe have led to a large number of commercial building projects being deferred, mainly in Australia but also in New Zealand.
It says significantly increased wool prices are also hitting woollen carpet sales, in the struggling retail sector here and in Australia.
A union representing textile workers says production cuts have resulted in more than 40 redundancies at Cavalier and associated yarn and carpet mills.
Meanwhile, the international campaign to raise the demand and value of wool is spreading, with further launches in Europe and Japan in the past week.
The UK-based campaign was introduced to New Zealand and Australia earlier this year. Following the Wool Modern design exhibition in London last month, it has been extended to Germany, Holland, Spain, Norway and Japan.
Events have ranged from fashion shows and retail displays in Berlin, Amsterdam and Madrid to a shearing display in Oslo and a reception in Tokyo, where guests mingled with grazing sheep on the British consulate lawns.