What are the biggest challenges for Tamworth's economy?

Business leaders from across the city gathered on Wednesday morning for the Tamworth Business Chamber's annual 'State of the City' forum where they heard from council's general manager Paul Bennett.

Mr Bennett opened on Tamworth's strengths, including one of the most successful country music festivals in recent history and the opening of Tamworth's intermodal train hub.

He said the investment from hub operator Qube Logistics is "one of the greatest achievements we've had in the last five or ten years".

"This really puts us on the map, and I don't think anybody would doubt you've got to have rail connectivity if you're going to grow the city into the future," Mr Bennett said.

But it was the general manager's section on economic challenges that perked up the ears of Tamworth's top entrepreneurs.

Council has identified a shortage of housing as one of the region's biggest issues.

Since housing is usually an issue for state and federal governments to tackle, one problem for council is finding the right space to operate in.

"Our challenge as a council is finding which space we can help to address," Mr Bennett said.

"Affordable housing is where local government has to step up to the plate. We have to make investments that'll give long, stable returns, and we know there's demand for that mid-level market."

Council is currently developing a new housing strategy which Mr Bennet says will help council "claim" a space in the housing equation.

"The key to this is making sure we do integrated development. We don't want to create just a low-cost housing estate or a top-end market estate. It's got to be a mix that reflects our demographics," he said.

On Tamworth's water security, council is working with NSW Government agencies on options to save its proposed water recycling plant after its biggest industry user pulled out of supporting the project.

Mr Bennett revealed Tamworth Regional Council is currently trying to fill more than 100 vacancies as persistent labour shortages continue to strangle regional industries.

The worker shortage is a compounding issue for council for many reasons, not least of which it slows down their ability to review and approve development applications (DAs) for new buildings around the city.

Tamworth has several huge projects on the books such as the new UNE campus, the Global Gateway Park, aquatics centre, multiple large housing estates, and many more large-scale projects demanding attention.

Mr Bennett said all of these projects need council to approve DAs and build roads, water, and sewage infrastructure.