Australia’s population increased rapidly over the past decade, lifting by 3.755 million, or 17.9%, according to the Australian Bureau of Statistics (ABS).
As at the end of last year, Australia’s resident population stood at 24.771 million, putting it on track to hit 25 million by early August this year based on current growth rates.
While population growth slowed last year, increasing by 388,000, down slightly on 2016’s 398,200 on the back of slower net overseas migration, the 1.6% growth rate is still high compared to other large nations, both developed and developing.
As seen in the chart below from the National Australia Bank (NAB), Australia’s population increase in percentage terms was only behind Saudi Arabia and New Zealand based on data from the United Nations and other national statistical agencies.
While there are other developing nations with far stronger rates of growth, it shows Australia, compared to most other developed nations, is still growing pretty quickly.
As the NAB explains, that’s helping to boost headline Australian economic growth, masking slow growth in productivity.
“Strong population growth has been a key driver of growth for the Australian economy in recent years, supporting housing demand, consumption, infrastructure requirements while also boosting labour supply,” it says.
“The key driver of variation in population growth continues to be net overseas migration (NOM) which contributed 240,000 to population growth of 388,000 in 2017.”
On the latter point, the NAB suggests that while strong immigration levels in recent years helped boost labour force participation, keeping Australian unemployment elevated despite strong hiring levels, should the slowdown seen in 2017 continue in the quarters ahead, it could lead to a decrease in unemployment faster than many currently expect.
“[Our research] suggests there may be a linkage between NOM and participation rates, given the considerable share of overseas arrivals that are either on student visas, working holiday visas or skilled migration visas,” it says.
“As such, a slowing in net overseas migration could be expected to provide a headwind to further sharp increases in the participation rate.
“This could mean unemployment could fall more sharply if strong employment growth is maintained.”
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