Swings and roundabouts

It has been a tale of two fortunes for city businesses this month.

On October 16, it was confirmed 29 workers, from a workforce of about 70, would lose their jobs at Donaghys' South Dunedin factory, and another nine jobs would be reviewed next year.

The initial job losses had been signalled earlier, with the company, which makes rope and farming products, saying it was struggling in the face of a consistently high New Zealand dollar and competition from Asia and Europe.

The possibility of further cuts next year is another cruel blow for workers, their families and the longstanding company, founded in Dunedin in 1876.

The company has experienced something of a roller-coaster ride of late. Only a year ago, it was bucking the manufacturing trend and taking on staff.

It had shifted its Melbourne and Invercargill operations to Dunedin, bringing about 16 jobs to the city, and said its ability to make ''high end'' rope for Team New Zealand's America's Cup campaign was enabling it to remain competitive from Dunedin.

At the beginning of the month,

when the proposed job cuts were announced, First Union organiser Ken Young was cynical about the Government's supposed claims of a ''rock star economy'', saying it was clearly ''not in manufacturing''.

The manufacturing sector is certainly vulnerable to fluctuations in the New Zealand dollar, to global supply and demand and to increasing global competition.

It can often feel like the canary in the mine, and of late there is no doubt manufacturing businesses have been doing it tough. Combined with the Government's push towards centralisation of services, it has felt like Dunedin, Otago and other regions are being left out in the cold.

But it is also important to retain some perspective. The global environment in which we operate has always meant swings and roundabouts for New Zealand goods and services.

And there are positive stories. While there have been high-profile business closures and job losses, for example at the likes of now-defunct Hillside Engineering in South Dunedin and the Earnscleugh gold mine, which closed last month (and there is no wish to deny the immediate trauma and impact on workers and families), many redundant workers have found other jobs in the area through other businesses doing well and being willing and able to take on staff. (In the case of Donaghys, other employers have reportedly already expressed interest in hiring workers.)

Unemployment in Otago is low, and favourable in comparison with other regions. The most recent labour figures from the June quarter show the unemployment rate in Otago is at 3.3%, and at March the overall South Island unemployment at 3.9% was considerably better than the North Island's 7%.

New Zealand's overall unemployment rate of 5.6% for the June quarter was the lowest since March 2009, is favourable compared with those in other OECD countries. Business confidence here is high.

And as one door closes, another opens. Dunedin's Emerson's Brewery last week announced it had bought land on Anzac Ave, and would move from its nearby Wickliffe St site to build a multimillion-dollar expanded operation with a new brewery, warehousing, retail store, bar and restaurant.

The company envisaged it would become a ''world-class'' tourist destination and the expansion would create jobs.

In a welcome addition, the purchase of the two adjacent pieces of land in Anzac Ave, belonging to the Dunedin City Council and Cr Doug Hall, resolves a long-running and costly access dispute over the land, dating back to the realignment of State Highway 88, and will allow the council to switch on traffic lights at the intersection of Anzac Ave and Frederick St, although a dispute over compensation now seems likely.

The expansion shows a further investment in and commitment to the city by owner Lion, on top of its $40 million upgrade of Dunedin's Speight's Brewery, and the planned operation also seems another good way to link the industrial and the hospitality sectors, showing how business and pleasure might combine in the harbourside area. Overall, it appears a recipe for success worthy of a toast.

 

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