A report by credit ratings agency Standard & Poor’s shows employment in Bendigo is heavily reliant on the manufacturing sector, which comprises more than 10 per cent of the total workforce and is forecast to experience negative growth.

The expected decline in manufacturing jobs coincides with a rise in home loan arrears in Bendigo during the past 10 months, which the report warns could continue to rise.

Mortgage delinquencies spiked in Bendigo in February but have since fallen below the 10-year average.

The report states job losses in the construction and manufacturing sectors “should be more than made up for by an expected increase in health and social services employment”, but a lack of diversity in job opportunities could still drive up the overall unemployment rate.

“The Department of Employment has forecast a less substantial increase in jobs outside of the healthcare sector in Bendigo compared with other regional centers,” it reads.

“This suggests employment options in Bendigo are likely to be less diverse in the future, which could drive up the local unemployment rate.”

The report shows future employment growth will be almost exclusively in the healthcare and social assistance sector, with only small gains in retail, accommodation and food services and education and training, and declines in mining, manufacturing and construction.

Anglicare Victoria regional director Carolyn Wallace said mortgage stress in the Bendigo area was being driven by a combination of living costs, including housing and utilities.

She said while Bendigo’s unemployment rate, which the report identified as 6.7 per cent, was part of the problem, underemployment and an increase in casual and part-time work also played a part.

“There’s a lot of factors that are contributing to medium to long-term unemployment and people need support to address all of those factors so they can find a job and keep a job,” she said.

Ms Wallace said while future employment growth may be concentrated in the healthcare sector, not all of those jobs would be in traditional roles such as nursing and physiotherapy.

“I think what we need is a concerted effort to understand the whole job market and what’s possible and available for people and to proactively assist employees as one industry closes or changes so they’re skilled and able to move into another sector,” she said.

The report’s co-author Alisha Treacy said Bendigo’s higher rate of mortgage stress was part of a trend seen across regional Australia.

“Despite the low interest rate environment we have seen delinquencies in regional Australia occurring at a faster rate than in metropolitan Melbourne, this shows the higher degree of mortgage stress outside the capital cities,” she said.