Research was undertaken by University of Newcastle's Hunter Research Foundation in February and March through interviews, focus groups and an online survey of hundreds of sector representatives, arts organisations, and individual artists.

The Impact of COVID-19 on the Hunter Region's Arts and Culture Sector found that 71 per cent of young artists, aged 18 to 35, felt increased isolation and loneliness because of COVID-19. Sixty per cent of respondents experienced loss of income from their creative practice but 63 per cent believed they could cope financially.

The report is part of a year-long 'Creative Newcastle' program led by key members of Hunter Creative Alliance, including Catapult Dance Choreographic Hub and Newcastle Writers Festival.

Newcastle Writers Festival director and HCA chair Rosemarie Milsom said the alliance initiated the research to obtain accurate data on the back of concerning anecdotal evidence about the fall-out of COVID-19. But she said the results were still a shock.

"Particularly with the younger age group, no one expected the impact on mental health to be so severe," she said.

"We knew things were bad, particularly last year. We wanted to get research. Going to government entities for support with anecdotal evidence wasn't enough."

She pointed out that many artists were unable to source JobKeeper or JobSeeker due to having other lines of employment or not being on an employer's books. The report found that 44 per cent of artists who experienced income loss were eligible for JobKeeper or JobSeeker.

Ms Milsom said the alliance would speak to all levels of government about support for the local arts sector including funding, better access to mental health services, and digital training so artists and organisations can adapt and innovate.

While the research was undertaken earlier this year, the effects are being felt perhaps more so now. Ms Milsom said the current Sydney lockdown was cause for concern for Hunter artists because events, exhibitions, and other employment opportunities have been affected.

Newcastle Music Festival announced on Monday its 2021 event, which was due to kick off on July 30, was cancelled due to the expanding outbreak in Sydney. Newcastle Writers Festival was also postponed from April until September, but Ms Milsom said the board was meeting weekly to assess the situation.

"We don't know where we're going to be placed," she said. "It's really difficult to plan, really difficult to focus.

"Last week felt I felt really, really miserable, and honestly I felt quite angry we're in this situation again.

"I thought by the second half of 2021 we would be in strong position. We were praised for moving the festival, coincidently it might have been better off in April."

The report was funded by City of Newcastle. Lord Mayor Nuatali Nelmes said the city was doing what it could to assist industry with recovery, with the support of the State and Federal Governments.