Primary industries such as forestry and dairy have responded to economic change over the past four decades. Associated secondary industries such as sawmills and dairy processing factories have also been affected by such change. Globalisation and the reduction of trade barriers have brought greater competitive pressure to bear on local industries and this has had a range of flow-on effects. Exit of less competitive enterprises has occurred, with specific shocks and periods of rapid change affecting both sectors. This paper presents findings from a study on the impacts and implications of economic shocks on small regional towns in Victoria. These shocks include the closure of a key processing facility such as a sawmill or dairy processing factory.
The study explored ways in which regional communities are impacted by, and respond to, economic shocks and the ways in which individual and community adaptation occurs. Qualitative and quantitative research methods were used to examine a total of nine case study locations - three of these were analysed in greater depth using qualitative interviews, while the other six were investigated using quantitative and desktop research sources. Many assumptions are attached to the impacts of factory or sawmill closure. There is an expectation of flow-on effects such as declining house prices, increased unemployment and population decline. This paper challenges some of these assumptions by showing the divergence in the experience of towns dealing with such shocks. Reasons for different outcomes include: the specific geographical and social context of towns; the relative importance of industry shocks compared to less visible background trends (such as demographic and social change); and the ways in which individuals may already have adapted to a new economic and social reality, for example, through commuting in response to less stable spatial patterns of employment opportunity.