The Grattan Institute says regional towns should focus on keeping current residents before trying to attract new ones.

The independent thinktank has commissioned a report on regional issues in Victoria, which makes suggestions on how to survive in an increasingly city-centric economy.

The report by economic consultants SGS found regional Victoria contributes less per hour of labour to the nation's economy than any other part of the country.

A decline in manufacturing has hit regional Victoria amid a boost in the financial services sector experienced in Melbourne and other capital cities.

“Regions tend to be poorer than the cities [but] income growth in the regions hasn't lagged behind the cities at all,” Grattan Institute fellow Brendan Coates said.

“They've generally grown at about the same rate on average … but what's happening is their losing population.

“The big problem is because there's not employment opportunities, there's no jobs, [and] people leave in search of those opportunities in the cities.

“But those that tend to stay, on average are doing okay.”

Mr Coates said an ageing population in regional Victoria will need more health services in order to keep people in town.

“One of the main drivers of employment in regional areas is the provision of healthcare for those that do choose to stay, particularly healthcare and aged care,” he said.

Mr Coates said regional towns should identify and play to their strengths, including visitor and tourism economies.

“Those areas are really going to struggle to attract lots of people … no matter how much money you throw at the problem, because they're too far away from the major cities where most of the employment and economic growth actually is,” he said.

Mr Coates said towns could increase their labour pool through migration.

A 2016 Deloitte Access study found resettling of 160 refugees from Myanmar in the Wimmera town of Nhill added more than $40 million and 70 jobs to the local economy.

But attracting large numbers of people to regional areas cannot happen without the employment opportunities to cater for them.

Victorian Regional Development Minister Jaala Pulford disagrees with the Grattan report, saying the Government had seen employment in regional areas increase.

“To suggest there are no jobs in regional Victoria is just not true,” Ms Pulford said.