The drought is having an obvious impact on the New England North West, but the region is "doing very well" compared to other parts of the country, according to a leading economic analyst.
Commonwealth Bank senior economist Ryan Felsman was guest speaker at the Tamworth Business Chamber breakfast on Wednesday morning, offering valuable insights and data on the local, state, national and global economies.
While the Australian economy is the weakest it has been since 2009, recording just 1.8 per cent growth for the March quarter, the Tamworth economy has been somewhat cushioned on the back of mining and infrastructure spending.
Mr Felsman also expects that downward trend to not continue, after the re-election of the Coalition government and essentially a two-month private and public spending hiatus in the lead-up to the election.
That 1.8pc still registers as the 28th straight year of growth in Australia.
"We have seen a bit of a weakening in Australia's economic story, and that is largely on the back of household consumption or spending, [which] is quite weak at the moment: also at 1.8 per cent," Mr Felsman said.
"Households have been reining in their spending because of the property downturn, mainly in the big cities, but also because we have had less dwelling and construction investment on the back of that, overlaid by a weakening in the global backdrop - the US-China trade war is having a knock-on effect."
While housing in Sydney has fallen 15pc, peak to trough, in the past 12 months, in the New England the downturn is much less severe: only 1.6pc.
"We are seeing quite strong demand from China for high-quality pellets of iron ore and coal - in particular Whitehaven benefits from that, and of course Shenhua will hopefully get up and running," Mr Felsman said.
"The region is broadly benefiting from a bit of a rebound in the mining sector, and agricultural commodities are still doing quite well despite the drought."
Mr Felsman concluded that the critical elements of securing the economic future of the Tamworth region was security around water, and an energy policy.
"We need to sort out the two dams - we have a budget surplus and there is money allocated for that, so get on with it," he said.
"We also need to get electricity and gas prices down - we are offshoring too much of our gas overseas, which is generating a lot of income, but it is at the expense of the population who are paying too much in utility bills."