The downturn in the United States economy is taking a toll in St. Stephen, N.B., as one of the town's largest employers is in the process of laying off workers temporarily.

Flakeboard Company Ltd. president Kelly Shotbolt confirmed Tuesday that layoffs among its 275 employees are underway. But he said the number of jobs lost will not be determined for a few days.

Much of the particle and medium-density fibreboard products turned out at the plant heads to the U.S., which is suffering under a financial crisis.

Shotbolt said the layoffs are temporary, but it’s unlikely business will pick up before the new year.

St. Stephen Mayor Jed Purcell said the plant, with its well-paying jobs, is vital to the Charlotte County economy.

The town has survived quite well so far, Purcell said, enjoying a spinoff from the construction of a natural gas pipeline. But the high Canadian dollar, increasing fuel costs and declining housing markets in the United States have taken a toll on businesses, he said.

"I don’t know what to say about the future though, because with what’s happening in the marketplace, and all the other things with the world markets, it’s a little scary," Purcell said.

Mike Rouse, executive director of Enterprise Charlotte, said the Flakeboard plant is a “huge part” of the economies of St. Stephen and Charlotte County. He’s hoping the economic crisis will turn around soon before too much damage is done.

"The thought is that things will eventually get better. But, you know, you hope it’s not too long before they do," he said.

St. Stephen, just across the international border from Calais, Maine, is best known for its other big employer — the Ganong Bros. Ltd. chocolate factory.

Last week, Moosehead Breweries announced it is temporarily laying off about 50 workers at its Saint John plant because of decreased demand for its beer in the United States. The layoffs will last until early November.