A combination of a high wool price, lack of new housing starts and the lack of progress on the Canterbury rebuild had conspired to send the New Zealand yarn and carpet industry "down the same negative path as the wood processing industry", FIRST Union (formerly NDU) general secretary Robert Reid said.

Other yarn makers had also notified that orders were down and the union would "not be surprised" to see further job losses at other mills.

Carpet and yarn makers were quoting the increase in the price of wool from $3/kg to $7/kg as being the "killer" for the industry, Mr Reid said.

While the increase in wool prices might be good for farmers, it was making woollen carpets uncompetitive, he said.

Read more in the Otago Daily Times here.