Economic vulnerability in the state's Barwon and Western districts - spanning Geelong, Warrnambool, Hamilton and Portland - is defined by rapid changes in employment trends that have sparked a steep slump of more than 7 per cent in the average work hours between 2002 and 2012.

It factors in rising unemployment, casualisation of the workforce and people working fewer hours.

The region was listed as the third-most vulnerable nationally, behind Gosford-Wyong and Central Western Sydney in NSW, where average work hours plummeted by more than 8 per cent.

The National Centre for Vocational Education Research report, released this week, showed declines in the region's three biggest industries of manufacturing, healthcare and retail trade drove the decrease in work hours during the decade.

Average manufacturing work hours by less than 1 per cent, but researchers warned that recent job cuts and the looming closure of Ford's Geelong plant would make matters worse.

"With closure of the Ford car manufacturing plant in Geelong by October 2016, resulting in the loss of around 500 jobs, this is likely to significantly impact upon the manufacturing sector in the region," the report said.

Report authors Michelle Circelli and John Stanwick said it was too soon to tell whether the effect of recent job cuts could be absorbed by other industries expanding in the area.

Alcoa's aluminium smelter is set to close in a month, and the rolling mill, which employs 400 people, will close by the end of the year.

It will be the latest in a string of economic blows for the Geelong region, which has had wide-scale job cuts at Ford, Target, Boral and Qantas at Avalon Airport.

The report said the federal government's decision for the headquarters of the National Disability Insurance Scheme to be based in Geelong "may address" part of the labour market problem.

The scheme is expected to create about 300 jobs by the time it is operational in 2019-20, but "there is no guarantee" all the jobs will be obtained by local residents.

Australian Workers Union state secretary Ben Davis said the Barwon region was facing a manufacturing crisis, but too little was being done by state and federal governments to help get people back into the workforce.

"They can't just put on a jobs fair and say we've done our bit," he said.

"There needs to be funding for retraining, assistance for people looking for jobs, and they need to case-manage people through this difficult time in their lives."

Mr Davis said the "full force" of the region's jobs crisis was yet to be reflected in employment data.

"In the Barwon region, we are seeing more casual and part-time employment but fewer of the full-time jobs that Geelong was built on."