Stabicraft management and ownership declined to comment when contacted but the Southland Express understands the Southland-based company announced between 30 and 40 redundancies last week.
A source said staff had been pre-warned the layoffs were coming which had led to incredible workplace stress among staff.
Redundancy packages had been negotiated and staff were under confidentiality agreements.
The company has factories in Invercargill, Auckland and the United States.
Kiwi Kraft Engineering owner Mark Presnall said he expected the boat manufacturing industry to slow for a couple of years as spending on "toys" tightened.
He empathised with Stabicraft’s situation.
"To be honest, I don’t like things like that happening to anyone.
"I know they’re competitors, but that’s not good for anyone."
He believed a combination of a downturn in sales, high production and raw material costs affected the industry on a national basis.
"It’s not just one [factory].
"It’s right across the country and people were handling it in different ways.
"There’s other manufacturers that are either reducing hours.
"It’s a tough industry."
Those who were buying boats might opt to buy a smaller model than they first intended.
"People are still loving boating and are still spending money on boating, but just not as much.
"If they can’t afford a big boat, they probably still want to have a smaller boat and not go as far."
People might switch from buying a new boat to a second-hand one. The industry was seasonal — it traditionally slowed at this time of the year and reignited about August, he said.
"It will be a hard winter."
He believed the Australian market had been unaffected until recently.
"They’re starting to experience a quite dramatic slowdown now as well."
As his manufacturing business was not as large as the Stabicraft operation which had international operations, his staff were using the slower period to do research and development as well as upskilling," Mr Presnall said.
Kiwi Kraft’s Invercargill manufacturing site had already been approached by skilled staff affected by the Stabicraft layoffs and he expected more would apply for work in the future.
Invercargill’s Image Boats owner Dean Wilkes also said the industry was being knocked around by the economy.
"I think that it’s going to take a long time for New Zealand [businesses] to come back again.
"The money they used to spend on toys is now not there, so a lot of people are suffering from a downturn in sales as well," Mr Wilkes said.
