Townsville and North West Queensland regions have a strong economic outlook for 2021, despite the impact of the coronavirus pandemic according to a new report.

The region's first quarterly economic outlook says the two economies benefited from rising commodity prices and the reopening of the state's borders at the end of 2020.

Regional Economic Advisory's Principal Economist Matthew Kelly says Townsville is doing well having also been affected by a major flood in 2019 and closure of the Yabulu Nickel Refinery in 2016.

"The property market is picking up, we're seeing construction up quite a bit, lending conditions have improved significantly, business confidence is very very high at the moment and really starting to see that growth and recovery story taking hold," Mr Kelly says.

Mr Kelly says the housing market is thriving due to record low interest rates and improvements in lending conditions. 

"The housing sector... it's probably the best that it's been since 2016 when Yabulu closed."

"A lot of construction is starting to happen, which has been on it's knees for quite a while, that's driving a lot of activity."

He says there are a number of agriculture and mining developments driving the positive projections.

"CopperString is a big one, getting energy out to the North West and also helping the renewable production out there is a big catalytic project."

"There's big irrigated agriculture projects across the region, like Big Rocks, which has been committed to, and Hells Gate, but even more broadly 15 Mile and the HIPCo projects going into the west, raising Burdekin Falls Dam as well. "

Mr Kelly is certain there will be a short term economic boost and hopes some of the major projects will sustain it through 2021.

But with any forecasts, there are always risks especially with the ongoing coronavirus pandemic.

"Also the key issue around insurance and the availability and affordability for some businesses and households right now is a real key issue that's putting the breaks on the economic recovery and what it could be," Mr Kelly says.

The outlook, produced by Regional Development Australia and the Regional Economic Advisory aims to inform governments of all levels.