Drawn from data provided by the Australian Bureau of Statistics, the report on youth unemployment across the country released by the Brotherhood found 16.5 per cent of people between the ages of 15 and 24 were unemployed in the Illawarra in the year to January.

In NSW, Parramatta had the highest rate of youth unemployment at 16.8 per cent, while in the Southern Highlands and Shoalhaven 15.9 per cent of young people were unemployed.

South Coast Labour Council secretary Arthur Rorris said the figures weren't surprising and believed the percentage of young people out of work in the Illawarra was actually much higher.

He pointed to the decline of traditional industries in the region, as well as an under-funded TAFE system as the main contributors to the high rate of youth unemployment.

"The decline of some of our industries we have previously depended on for employment growth has meant not only an increase in retrenchments of existing workers, but also a reduction of opportunities for young people entering the workforce," Mr Rorris said.

"It's not the first time we've had a tough employment outlook in the region. However, previously we've had a TAFE system that has been resourced a lot better than it is now, and a system that encouraged and required young people to train, particularly at times when they did not have jobs to go to."

He said the federal government should play a more "active and direct" role in the economy and change tack on current TAFE and training policies to make a dent in youth unemployment.

The Brotherhood of St Laurence also called on the federal government to develop a new national strategy to lower these figures.

An average of 12.4 per cent of young people across the country were unemployed, up from 9 per cent in January 2008. Tasmania had the worst figures, with more than 18 per cent of young people out of work in several regions across the state.

Cairns, Northern Adelaide and the outback Northern Territory were also areas of concern.