Chamber chief executive John Christie made the call while speaking at yesterday's council public forum in Dunedin.
He also called for councillors to help organise an economic development summit in the city, which would bring together key stakeholders to discuss possible solutions to help the city's deteriorating economy.
Information gleaned from the chamber's latest business vitality survey confirmed what many already knew - the city's businesses were feeling the pinch of global and national economic decline, he warned.
"Sales are in negative territory and overall, profitability is also quite dramatically down on where it was 12 months ago.
"That's pretty gloomy. We are not pessimistic by nature, but that's the data from reputable sources. They are telling a story I think the city needs to hear," he said.
There were also warning signs internationally and across New Zealand that were relevant to Dunedin, he warned.
International data showed a growing number of New Zealand firms trading abroad, in countries such as the United States, were facing increasing payment delays, or were increasingly not receiving full payments.
Demand for luxury products, including high-end wines, and exports was weakening, commodity prices were dropping and unemployment was expected to rise.
And Treasury reports indicated the overall market turmoil had intensified in the past two months, he said.
The challenge was for the city's leaders to respond to today's circumstances, he said.
"People are comparing it to the 1930s, but the world has moved on a long way from then. This is not a recession or downturn we have ever seen before."
Practical solutions were needed, including reconsidering rates relief packages, supporting local companies and their products, and bringing forward the council's budgeted expenditure - for projects big and small - where possible to stimulate the economy, he said.
The council could not assume the economic downturn would "go away like Y2K", and now was not the time to cut spending on projects that could help stimulate the city economy.
"I definitely think this is not the time to retrench," Mr Christie said.
Dunedin was well placed, compared with other New Zealand centres, to ride out the worst of the downturn, with a strong regional economy, but some small businesses "were being battered around".
The council's actions, particularly in buying locally and paying for services promptly, could be the difference between some businesses staying or going, he believed.
The city's CBD should also be kept as tidy and free from intimidation as possible, to ensure consumers were not chased away, he said.
"We can't do anything that turns people away from the city at this point in time," he said.
Dunedin Council of Social Services executive officer Sue Russell, who also spoke yesterday, said the council's economic development unit should work more closely with the city's estimated 1500 community organisations.
Together they employed 200 full-time and 1700 part-time staff, managed more than 2000 volunteers and served 100,000 clients.
She feared there would be more demand for their services in times of economic hardship, even as access to money and other resources became more difficult.
Public forum chairman Cr John Bezett said there were synergies between several of the presentations, which would be followed by staff and councillors in the coming weeks.
