When it comes to analysing economic trends, demography is often overlooked.
It shouldn’t be.
It is influential over any number of things, ranging from house prices to employment prospects, economic growth to residents quality of life.
And that list just scratches the surface. It is an important factor, often predicting trends well before they are seen in other hard economic data.
In Australia, demographics has started to take more prominence in the economic and political debate, boosted by well-documented concerns surrounding housing affordability in the nation’s largest cities, slowing migration levels and an increasingly aging population.
For all the discussion over what particular component drove GDP growth over any given quarter, the truth is that population growth has been a major factor behind Australia’s near-unprecedented run of 25 years of uninterrupted economic growth.
Tapas Stickland, a markets economist at the National Australia Bank, is one analyst who certainly has an interest in what’s been happening across Australia’s populous, looking at where things are currently trending and where they’re likely to head in the years ahead.
Following the release of the ABS’ quarterly demographics report last week, Strickland has put together an excellent chart pack looking at everything from population growth to its composition, population trends at the state and territory level, alnd compositional changes by age bracket.
Here’s just a few of the excellent charts produced by Strickland that help provide a picture to what’s happening within the Australian populous, starting with overall population growth.
“Australia’s population grew 1.4% y/y to Q1 2016, around the same rate of growth it has been averaging for the past few quarters with population growth stabilising at lower but still very high rates of growth by historical (and international) standards,” says Strickland.
He adds that this has provided “a solid underpinning to GDP growth”.
Population growth compared to other major economies
Composition of population growth
“Stabilisation in population growth driven by a pick-up in Arrivals to Australia, while Departures, which had increased, appear to have moderated slightly,” says Strickland.
Total population by state and territory
Population growth by state and territory
“Population growth is strongest in the non-mining states of NSW and Vic, while population growth has eased sharply in QLD, WA and the NT. Among the smaller states, population growth continues to ease in SA but has steadily increased in Tas”, notes Strickland.
In terms of the impact on house prices, and potentially future levels of residential construction activity, he suggests “strong population growth rates in NSW and Vic will underpin housing demand in those states, while slowing population growth in WA, will likely weigh on the housing market in that state”.
Impact of overseas and interstate migration by state and territory
“Slowing in population growth in WA and QLD driven by lower net overseas migration,” says Strickland.
“In contrast, net overseas migration still strong in NSW and seems to be accelerating in Vic. Interstate migration into Vic also picking up strongly.
“While less people are leaving NSW on a net basis, this has reversed in recent quarters with trends suggesting some are leaving NSW to Vic and QLD,” he adds.
Change in population by age bracket
“Population ageing starting to accelerate, but still strong growth in the key 25-34 year age bracket and also in the 0-14 age bracket,” Stickland notes.
The oldest states, and the youngest
Using an old age dependency ratio (an antiquated economic term in the year 2016) — simply the proportion of Australians aged 65 years and older compared to those aged 15-64 – the states with the eldest populations are Tasmania, South Australia and New South Wales, while Western Australia and Queensland have the youngest populations in the country.
“Population ageing is more pronounced in Tas and SA while less of an issue in WA,” says Strickland. “Strong immigration flows only partially slow population aging.”