What the latest business data really says about the Illawarra's future
The region still wants to hire
The Illawarra's appetite for hiring is outpacing its neighbours, even as the broader picture painted by the March 2026 Business Conditions Survey shows confidence deteriorating across the state.
Business Illawarra director Coralie McCarthy walked a Wednesday webinar audience through the survey findings alongside statewide comparisons.
“There are a lot of people I talk to that are feeling really hopeless or isolated,” she said. “We’re hearing requests for mental health support services, which is not something that always comes up in business forums.” When that sentiment starts appearing in business conversations, McCarthy argues, it stops being an anomaly and begins to be a signal.
While business confidence across New South Wales sits at a sobering -42.8 on the forward outlook index, the Southern Highlands and Shoalhaven have dropped to -62.1.
The Illawarra’s picture is more nuanced. While current conditions are soft across NSW, there’s an expectation the next quarter will be better. In the Illawarra, it’s the opposite: stable today, uncertain about tomorrow.
Pockets of demand
Yet even against that backdrop, the Illawarra recorded something striking on hiring intention: 23 per cent of businesses plan to add staff in the next three months, one of the highest rates among regional NSW centres surveyed. Compare that to the Southern Highlands and Shoalhaven, where just 7 per cent plan to hire and 24 per cent have already cut headcount in the past quarter.
The Illawarra’s services and professional sectors continue to generate pockets of demand for labour, even as consumer-facing industries remain exposed. Further south, a heavier mix of manufacturing and retail is translating cost pressures more directly into workforce cuts.
Those pressures intensified in early February. Among respondents who answered after the rate decision, confidence dropped 14 points.
Costs remain the constant
Insurance and government charges continue to rank as the most significant burdens, while compliance is absorbing increasing time and capital. Illawarra businesses are more likely than the NSW average to be spending between $20,000 and $250,000 a year meeting regulatory requirements, and it’s a weight that falls hardest on smaller operators.
For some, the consequences are immediate. Delays tied to approvals can mean delayed payment, turning compliance into a direct cashflow risk, McCarthy said.
“One thing that is clear from the Business Conditions Survey is that businesses are doing it tough. Red tape and high cost of compliance continue to be a significant barrier to profit. Business Illawarra is calling for a 1.2% concession in our region on payroll tax and fast-tracking the review of the emergency services levy within insurances. Small business needs help and is the lifeblood of our community.”
At the same time, workforce constraints are shifting.
Businesses now rank housing availability and affordability as a more significant barrier to attracting staff in the Illawarra than energy reliability, according to the report. That’s a signal the housing shortage is no longer just a social issue, but an economic constraint.
With the 2027 NSW State Election approaching, the message from business is consistent: reduce costs, simplify regulation, and address housing supply. The hiring data suggests the Illawarra still has economic ambition. The question is whether government will let it breathe.
And while you’re here, as it’s Friday …
If mixed martial arts is your thing, find your way to the movies and watch Russell Crowe’s latest - Beast.
A former champ steps back into the cage, not for glory, but to pull his brother out of trouble. It’s heart, pressure, and fists all wrapped into one. Its human stars are Russell Crowe, Daniel MacPherson, and Luke Hemsworth, with Amy Shark stepping in for her first feature film role.
But wait for … Port Kembla.
The Illawarra’s industrial heartland combined with its beautiful coastline is an amazing backdrop for MMA fighter Patton James’ (Daniel MacPherson) life as a commercial fisherman. Guess which breakwall he spends a fair amount of time on?
It’s on at Hoyts Warrawong now.
