A growing population leads to a growing economy, increased business, and higher asset values because more people mean more demand. This impacts the everyday Australian’s wealth.
There are only two ways the population grows – naturally (more births than deaths) or organically (migration).
The overall rate of natural population growth in Australia may have reached its highest point.
The rate of natural population growth in Australia reached its peak in 2012. Since then, there has been a consistent decrease in births and an increase in deaths, resulting in a declining rate of natural population growth.
Unsurprisingly, the number of new births in Australia peaked in 2012 with 312,200.
Since 2012, the number of births in Australia dropped 9 per cent. Over the same period, deaths increased by 23 per cent.
It makes sense; we do have an ageing population and less people are having children (or at least they’re having fewer children per family unit).
It’s not just happening in Australia, falling birth rates are a global trend with the United Nations reporting that worldwide fertility rates have dropped steadily for more than three decades – what was an average of 3.3 births per woman in 1990 has reduced to 2.3 in 2024.
For context, the replacement level of fertility is typically 2.1. This accounts for factors such as infant mortality and the natural variance in the ratio of males to females.
Fertility rates in more developed countries currently sit at 1.46 per woman, compared to 2.36 in less developed countries, and 3.89 in the least developed countries.
The rising cost of living, increased female participation in the workforce and shifting social expectations have no doubt all contributed to this trend. All of which are more pronounced in developed countries.
Australia’s fertility rate is the fourth highest among the top 15 economies and yet it sits below replacement level at just 1.64 per woman.
Add to this the fact we are living longer.
Global life expectancy has increased by approximately 10 years in the last 50 years.
In 1974, global life expectancy was about 59 years, and by 2024, it has risen to 69 years.
The average life expectancy of an Australian sits at a whopping 83.9 years!
What this says to me is that we have managed to kick the can down the road when it comes to natural population growth.
But should the drop in birth date, and rise in death rate, continue to increase we may see a natural decrease (i.e. more deaths than births) in Australia as early as 2041. Japan is a country that has faced the economic challenges of a shrinking population since 2008.
There is a lot of debate surrounding migration at the moment, with questions and debate raging around what is the right number of migrants that should be welcomed into the country.
There are a lot of different points of view, but what I do know for certain is that without it, our population will stop growing in the not-too-distant future and that would be a huge challenge for the economy.
