Manufacturing employment and investment figures in the coastal half of the Hunter were “a positive”, said State of the Regions co-author Dr Ian Manning, with 23,295 people employed in manufacturing in 2017, compared with 21,499 in 2012 and 17,832 in 2002.

The report was released by the Australian Local Government Association on the eve of its national general assembly in Canberra this week.

Even in the Upper Hunter where the mining boom from 2005 has had its greatest impacts on labour availability and increased employment costs, and the high boom-induced exchange rate devastated many in the non-resource sector, manufacturing continues to employ more than 7000 people, the report showed.

“Manufacturers took a real shock during the mining boom but those that survived are real survivors,” Dr Manning said.

“It’ll take some time yet to convince people the exchange rate is back under control and it will be worth investing in again, but the fact that Newcastle has a manufacturing tradition and a fair amount of intellectual support for that, in addition to a marketing culture, are signs of it going back to its traditional strengths.

“Newcastle can look forward, even if coal disappears suddenly, because it has a diversified economic base and there’s quite a lot to fall back on.”

Newcastle was in direct contrast with its southern manufacturing centre counterpart Wollongong, which State of the Regions report data showed had “failed to diversify out of primary metal smelting”.

The annual report, prepared by the National Institute of Economic and Industry Research, found the mining boom “brought costs as well as benefits”, and “if commodity prices stay around current levels, by 2020 Australia would probably have been better off without the mining boom”.

“Whatever the case may be by 2020, the current reality as the mining boom subsides is that Australia will have to return to knowledge and innovation as the foundation of its prosperity,” the report found.

On a national level the report found that of all industries manufacturing suffered most during the mining boom.

“Hours worked have fallen even more rapidly than in agriculture,” the report found.

“Despite this, the industry remains the most substantial of the trade-exposed industries, generating more hours of work than either agriculture or mining.”

State of the Regions compares current and pre-boom data going back to 1997 to chart productivity, inequality and opportunities for growth both in and between Australia’s 67 regions. The data includes hourly pay rates, household income, household debt, per capita disposable income, property values, construction and employment figures and innovation indicators such as patent registrations.

The lower half of the Hunter centred on Newcastle had an annual average patent registration rate of 146 from 2009 to 2017, giving it a national regional ranking of 21. The inland Hunter had an annual average of 49.1 over the same period, with a national regional ranking of 38. The central Sydney metropolitan area had an annual average of 735.3 patent registrations, with a regional ranking of 2. The figure includes 116.5 “hi tech” registrations per year, and 65.8 information technology registrations.

”Patents is an indication of the amount of research and development that’s going on,” Dr Manning said.

“What it says is a region is one where people are developing new products. What we can say from these figures is that Newcastle is not doing too badly. It’s far from the worst but it should be better and I think it could be better as soon as attention turns to the development of products and services.”

Dr Manning said the State of the Regions report, with its 2017 theme of “Pillars of Regional Growth”, was a challenge to local government.

“Local government needs to get its act together. I’m not exactly sure that Newcastle, Port Stephens, Maitland, Cessnock, Singleton and Lake Macquarie councils are really as vibrant as they should be in a planning for the future sense,” he said.

“What I do observe is that there are now councils, particularly regional councils in Queensland, getting their acts together, maybe because they’ve had a sort of a fright. The downturn in the coal industry has hit much harder in Queensland regional areas than the Hunter.”