The deep recession continues to pound the region as Wheatland Tube Co. said Tuesday the company is “consolidating’’ its Sharon plant on Mill Street into its Council Avenue plant in Wheatland.

Consolidation of the two pipe mills, which will transpire over four months, will result in 40 workers being laid off. These are on top of the rolling layoffs affecting much of Wheatland Tube’s 900 area employees for much of the year.

“You have to ramp up or down according to market demands,’’ said Bill Kerins, president of Wheatland Tube Co.

“Currently, with business conditions being the way they are there isn’t enough there to justify operating Mill Street and Church Street.’’

Equipment from the Sharon plant will be moved into the Wheatland mill to save the expense of running two mills simultaneously, he said.

The Sharon plant’s hot mill operations have ceased production as a result of slow sales.

“There is no truth that the plant is closing,’’ Kerins said of the Sharon plant. “Anyone not consolidating right now isn’t making the right decisions.’’

Based on current orders this arrangement is likely to last at least through 2010, he said.

But an office staff and machine shop workers will still man their posts at the Sharon plant.

During this period workers from both plants will be moved back-and-forth to handle particular jobs. Threading operations, for example, will continue in Sharon.

To accommodate the move the company is spending $2 million at the Wheatland plant to upgrade equipment and build a 6,000-square-foot addition to house machinery from the Sharon mill, Kerins said.

This is the latest blow for Mercer County’s industrial base, which was rocked again last month when General Electric Transportation said 200 workers at its Grove City locomotive engine plant would permanently lose their jobs due to a steep downturn in orders.

GE and this latest layoff at Wheatland Tube have yet to be counted in the unemployment rates which are well above the national 9.8 percent rate and the state’s 8.8 percent rate.

Mercer County’s jobless rate grew to a revised 12.8 percent in August making it the fifth highest among Pennsylvania’s 67 counties.

September’s preliminary figures show the city of Sharon has the second highest unemployment rate of any city or municipality tracked by the state at 13.5 percent.