The Illawarra's jobless rate is expected to pass 7 per cent when regional figures are released next week.
The prediction comes from the Illawarra Regional Information Service (IRIS) which is tracking a long-term trend of worsening unemployment across the region.
A rise in the number of jobless would be in line with IRIS's own business survey released on Thursday which showed that in the last quarter, more businesses were laying off workers than employing them.
"That employment index really slumped during the June quarter and it was particularly severe in that traditional manufacturing area," IRIS executive director Simon Pomfret said.
"We would expect our unemployment to rise when the [July] figures come out next week."
The Australian Bureau of Statistics released its national July unemployment data on Thursday, showing the jobless rate jumped from 6.1 per cent in June to 6.4 per cent, the highest in 12 years.
The Illawarra's jobless rate for June was 6.8 per cent.
"The long-term trend of the last six to 12 months is unemployment has been creeping up on the back of tough conditions economically in the region," Mr Pomfret said.
The Illawarra economy wasn't as healthy as Sydney's, which he put down to a lack of confidence in the strength of the region.
"Particularly where we've had a number of organisations across a few sectors closing down and making retrenchments," he said.
"That impacts on overall confidence and once confidence starts to slide people stop spending. Interest rates are still quite low but the consumer sector out there is saying people aren't spending."
The GPT Group announced this month its new CBD shopping centre would create 800 full-time equivalent jobs when it opens in late September.
But Mr Pomfret said this and other developments were unlikely to push down unemployment, and would just help the region "keep our head above water".
"I don't think it will have a significant dent," he said.
"We've got to continue to generate jobs just to cope with the flows and ebbs of population and people coming on and off the labour force.
"You need those continual improvements in development to generate jobs and, as you can see in the last 10 to 15 years, we're still playing a catch-up game with the losses we're having in that manufacturing sector."
Diversified economy the key: Abetz
The Illawarra’s high unemployment rate cannot be blamed on ‘‘dole bludgers’’, Federal Employment Minister Eric Abetz said on Thursday.
Mr Abetz was in Wollongong for a suite of engagements, including the opening of the University of Wollongong’s Sustainable Building Research Centre.
It was the same day the Australian Bureau of Statistics released the July national jobless figure of 6.4 per cent – a rise of 0.3per cent on the previous month.
The Illawarra figure, which will be released next week, is expected to go beyond 7per cent.
Mr Abetz said it was wrong to blame dole bludgers for the high jobless rate.
‘‘Clearly, there are not enough jobs in a whole host of areas of Australia,’’ Mr Abetz said.
‘‘Are there some dole bludgers? Yes, it stands to reason, of course there are, but the imperative that we as a government have set ourselves of growing one million jobs is based on the fact that we do need to grow jobs.
‘‘It’s not just because people don’t want to work – there simply aren’t the opportunities and we need to create the economic environment where those jobs opportunities can arise.’’
He said this environment would be created by having the government’s range of economic measures passed through the Senate.
Mr Abetz said he wanted to see more innovation and forward-thinking such as that on display at the Innovation Campus.
But he cautioned that, while the Illawarra employment market was moving towards the IT, health and education sectors, it should not ignore areas that had employed people for decades.
‘‘I am the exact opposite of a job snob,’’ he said.
‘‘I want research, I want innovation, I want mining, I want manufacturing. I want every possible job and as diverse an economy as possible.
‘‘What has been a problem for Australia from time to time is that you could ride on the sheep’s back forever and not diversify, then ride on the resource boom and not bother diversifying.
‘‘A good solid economy will always be looking to diversify and have as many irons in the fire as possible to ensure that if there’s a downturn in tourism, hopefully there won’t be one in manufacturing.’’
- Glen Humphries