Construction and mining industries in Newcastle and Lake Macquarie have lost a combined average of almost 6000 workers in the last four years according to the latest monthly ABS data.
Hunter's business community said despite strong regional population growth, the region's workforce remained "stuck in a groove".
The 12-month average for mining jobs dropped from an average of 16,100 in February 2020 to 14,100 in 2024, while construction jobs declined from 22,000 to 18,100 in the same period.
This year in August, there were 11,200 jobs lost in the region but only 1400 job seekers were added to the pool of unemployed.
Business Hunter CEO Bob Hawes said while monthly statistics could be volatile, it was a concern that a section of the population appeared demotivated from looking for work.
"Businesses are frustrated in that they can't attract the right talent from the small pool of people actively looking for work," Mr Hawes said.
"We're growing our population, and there are jobs out there, but growth in the overall workforce is static at best," he said.
He said the numbers continued to stagger him as the estimated population growth of people aged 15 years and over since February 2020 was 42,100 and the job vacancy rate was stable with 5500 jobs on offer.
"If the region were tracking closer to our historical workforce participation rate, I suspect the job vacancy numbers would be less and the unemployment rate a lot higher," he said.
Based on the ABS statistics, people in work or looking for work dropped by 4400 between February 2020 and August 2024.
"I'm at a loss to explain why today's workforce number isn't significantly greater and clearly there is demand for this to be the case," Mr Hawes said.
Other industries that lost workers included, information and media technology, administrative and support services, and agriculture, forestry and fishing.
While some industries had struggled, others had only strengthened their workforce.
Accommodation and food services jobs rose by an average of 6500 in the last four years, while education and training rose by 5800.
Healthcare and social assistance (8000) and retail (almost 6000) also experienced workforce growth during the same period.
Mr Hawes said there was a discrepancy between the region's qualifications and job criteria based on the 2021 census where 27 percent had a bachelor degree or advanced diploma whereas more than 40 per cent of jobs on offer had them in the eligibility criteria.
"We're behind the eight ball at a time when there is limited scope for people to move into or across the region because of the housing crisis and a time lag for people to upgrade to a higher skill base, which obviously takes time," he said.
He noted that education courses and training programs were altering their offerings in response to increasing demand for flexibility such as fee free TAFE positions, and blended training arrangements.
The apprenticeship take up and completion, however, had declined despite the need for it to be growing, he said.
"We suspect this is partly in response to the repealing of the generous fee subsidy arrangements on offer through the pandemic," he said.
"There is a long list of trades the nation needs to have in place to match future growth ambitions in industries like renewable energy, Defence, and construction."
The region's unemployment rate of 4.1 per cent was in line with figures recorded throughout NSW while the workforce participation rate of 61 per cent is below the national rate of around 67 per cent.
