South Australia is likely to be stuck with high unemployment for some time with a new report predicting minimal jobs growth over the next two years.
The University of Adelaide's Centre for Economic Studies says the closure of car maker Holden is about to hit, and there are few major projects on the immediate horizon.
Employment conditions in South Australia are worse than might be hoped, despite modest growth in household spending and public sector investment, the centre says in its latest economic briefing.
SA's jobless rate has hovered around seven per cent for the past year or so and has usually been the highest in the nation.
Last week's state budget forecast employment growth of about one per cent over each of the next two year, but the centre's report suggests it may be more like 0.75 per cent.
It says that would be enough to keep pace with population growth but not enough to bring unemployment down.
University of Adelaide associate professor Michael O'Neil said there were signs economic conditions in South Australia's main trading partners were improving and spending in SA had accelerated.
"But job losses at Holden and associated suppliers are holding back statewide employment," he said on Friday.
"In addition, the timing of transitions between large defence contracts is also unfavourable for the near-term employment outlook.
"South Australia's employment growth has come to a halt in 2017 and the unemployment rate has risen.
"Unfortunately, forward indicators don't hold out much prospect of improvement through the rest of 2017."
Professor O'Neil said a return to stronger economic growth in South Australia was unlikely to come from one or two large projects, but instead would need many successes at the smaller scale, with companies competing directly with overseas suppliers for markets and for investment.
He said a robust level of agricultural exports in recent years also demonstrated SA's ability to compete globally.
