Wollongong is forecast to add another 22,000 jobs in the next five years, with the city's traditional industries doing much of the heavy lifting, a new report has found.
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The KPMG-authored report paints a rosy picture of the growth of the Illawarra's jobs market, even as unemployment rises off record lows in 2022.
In December 2023, the unemployment rate in Wollongong at 3.8 per cent was above the NSW-wide figure of 3.3 per cent, a first since Wollongong's dramatic fall in unemployment surpassed the statewide average in late 2022.
Urban economist at KPMG Terry Rawnsley said the increase in unemployment in late 2023 was driven by the rapid rise in interest rates and cost of living pressures, which had moderated in 2024.
"We will probably have six to nine months of reprieve from those interest rate rises, and cost of living is starting to ease off," he said.
"I think we've got to that point where there's enough confidence that people will go out and spend money."
Data from the Jobs and Skills Australia shows that the parts of the Illawarra that experienced the highest increase in unemployment were around Corrimal and Bellambi.
The total number of unemployed people was highest in Warilla, with 764 unemployed people in December 2023.
Either end of the Illawarra was where unemployment was the lowest, with just 49 unemployed people in the Kiama Hinterland and Gerringong and 51 in Helensburgh.
With the return of spending, Mr Rawnsley said employment would pick up, particularly in hospitality and retail.
However, in the long term, job ads in Wollongong would be driven by the resurgence of the region's traditional industrial base, particularly manufacturing and transport and warehousing.
KPMG Wollongong partner Adam Cole said the combination of the port facilities in Port Kembla, an existing advanced manufacturing cluster and the prospect of additional clean energy projects would require additional workers.
But this jobs growth hinged upon the availability of housing in the Illawarra.
With Wollongong still relatively affordable when compared to the Sydney housing market, the region could attract workers and young families priced out of the Sydney market. However if house prices and rents continued to increase, internal migrants would look elsewhere.
"That's a challenge and dwelling approvals in the last year - 1613 - means that the market is not going to loosen up anytime soon. It's going to continue to be a very tight housing market," Mr Rawnsley said.
Mr Rawnsley said the combination of high costs and high interest rates meant projects were not viable for developers, and that governments could work to reduce red tape and relax zoning restrictions, but also said businesses could rethink how they went about addressing housing, citing the construction of a hotel in Townsville that included workers' accommodation.
"There's sort of innovation on both sides of the fence to get housing, beds for people to sleep in to make your business.
In this case, Wollongong's proximity to Sydney and its connection to the Sydney market made it challenging for homebuyers, it also meant the regional economy had access to the skills in a large city such as Sydney, for the specialised roles, Mr Cole said.
"It doesn't matter whether it's clean energy, advanced manufacturing and who knows what's going to happen with defence in the future, the proximity [of Wollongong to Sydney] certainly makes the region attractive."
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