Cost-of-living pressures and the lingering effects of the COVID-19 pandemic have hit regional Victoria's economy hard but its communities remain resilient.
The assessment of economic health beyond the major cities comes as state government agency Regional Development Victoria released its annual report on Tuesday.
Regional Victoria's economy is worth about $100 billion, with one in four Victorians living there.
The regions account for more than 850,000 jobs and are home to one in five of the state's small businesses.
Agency chief executive Beth Jones said communities had been battered by increasing interest rates, high inflation and significant cost of living pressures along with long term issues associated with COVID-19 pandemic recovery and climate change.
"Over the 2022/23 year, the Victorian economy experienced pressures that have not been a major concern for well over a decade," Ms Jones said.
Despite the knock-on of the pandemic, she said regional Victoria had rebounded strongly with employment exceeding pre‑2019 levels.
"Unemployment at a record low and our regional economy is worth almost $100 billion, growing $2.2 billion each year since 2015."
The government's decision to fast-track the ban of native timber in the state's forests to 2024 could have significant impacts on communities that rely on the industry, the development agency warned.
Housing continues to be a priority for regional communities as migrants make a strong return.
But a shortage in suitable living conditions remains a "key barrier" for those looking to retain key workers and bridging the gap in youth homelessness remains a struggle.
"Multiple partnerships identified a need to improve the supply of affordable and appropriate accommodation," Ms Jones said.
