Tamworth grew by 0.4 per cent between 2020 and 2021, according to the last Australian Bureau of Statistics (ABS) figures released this week.

The city grew faster than the state average of 0.3 per cent.

But population growth was actually lower than the city's 20 year average of 0.78 per cent population growth per year.

Sydney shrank during the initial 2020 COVID-19 crisis.

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Business NSW Regional Manager Joe Townsend said the city's growth prospects had been hurt during the pandemic by a closure of international borders.

With borders reopening in 2022 and foreign workers returning to Australian shores, the city should grow too, he said.

"For us here in the New England, we used to get around about 600 foreign migrants net movements come into the region," he said.

"Our population was always growing through that avenue and that's decreased. With international borders opening up, hopefully we can see some of those more skilled migrants and skilled visas and the like come back into the region, which will help."

Mr Townsend said the population figures were in line with state government forecasts that Tamworth would continue to intensify its position as a regional centre, with smaller communities expected to shrink.

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Tamworth mayor Russell Webb said the city had grown rapidly in the months following the end of the lockdown period, as evidenced by the enormous increase in development applications being processed by council.

"That [period of time] went through that period of COVID and uncertainty. What we've seen since then is a massive growth of development applications for building, which is clearly identifying to us that the population growth is over 1 per cent for the last 12 months for Tamworth," he said.

Deputy mayor Mark Rodda said the government needed to invest in the region's transport, health and education facilities to prepare it to take a role as regional hub.

Redoubled effort on decentralisation could also help the government resolve problems with metropolitan "overpopulation", he said.

"I think governments should always be looking at moving businesses and industry that do not have to be in the city out to country areas, and that will subsequently attract people out to country areas and keep them viable," he said.

"It is nice to see those small increases in population for a city like Tamworth, because it does show that we've clearly got the infrastructure and services and probably the jobs to attract people here and keep people here, and that's a good thing. News like the university announcement, that can only enhance our region as a place to move."

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Almost Tamworth's entire growth rate came in what the ABS calls the "natural increase" as opposed to internal or international migration.

With 356 more babies born in the city than Tamworth deaths, births made up for the bulk of the increase. A net total of 169 people emigrated from Tamworth elsewhere in Australia during the period. A net total of 51 people moved to Tamworth from overseas.

Smaller communities around the region have remained stagnant, with cities and towns like Armidale, Inverell and Tenterfield, Moree and Narrabri and Quirindi all shrinking. Armidale shrank the fastest, with the population dropping 0.8 per cent.

Gunnedah grew by 0.1 per cent, and Gunnedah region by 0.6 per cent.

The federal electorate of New England actually shrank overall, with net internal migration slightly negative.

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An estimated 62,417 people lived in the Tamworth region on June 30 2021, according to the ABS.

The city grew from 53,394 in 2001 to 62,417 in 2021. About 5923 people live in Tamworth West, 16,359 in Tamworth North which includes East Tamworth and 21,048 in Tamworth East, which includes South Tamworth and Hillvue. About 19,087 people live in "Tamworth Region", which includes Manilla, Kootingal and other small communities in the local government.

Pandemic-driven rural flight was a real phenomenon, according to the ABS stats, with Greater Sydney shrinking by about 0.1 per cent while the rest of NSW grew by 1 per cent. Melbourne shrank even faster, down 1.2 per cent, with rural Victoria growing by 1 per cent.

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