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Category: Economic Trends / Population and Demographics / Immigration

Stabilising population growth boosting economy: UBS

Friday, 22 Jul 2016 14:27:48 | Michael Janda

The slowdown in population growth has been due to more Australians leaving.

Australia's population growth has stabilised at 1.4 per cent per annum, in positive news for the nation's economic outlook, according to UBS.

Key points:

  • Population growth down from 2.2pc in 2008 to 1.4pc last year
  • Number of Australians leaving country jumps from 256,000 to 306,000 since 2012
  • Number of immigrants down by 10,000 per annum between 2012 and 2015

In a report examining recent ABS data, UBS found that the population growth rate had fallen from a high of 2.2 per cent in 2008, pre-financial crisis, and a more recent 2012 peak of 1.8 per cent.

The investment bank observed that most of the slowdown in population growth had actually come from increased emigration.

"Slowing in net migration has been almost entirely due to a pick-up in Australians migrating offshore (with a record 306,000 Australians migrating outbound in 2015), rather than fewer inbound permanent migrants," the bank's economists noted.

In fact, the UBS analysis showed only a 10,000-strong fall in the number of immigrants between 2012 and 2015, to 483,000 per annum, but a marked 50,000-strong rise in the number of Australians departing the country.

A slowing birth rate and slightly increasing death rate (due to the ageing population) in recent times have also weighed on population growth.

UBS population growth graph Photo: Population growth has stabilised after slowing dramatically. (ABS; UBS)

UBS said Australia's population growth remains high by international standards, and the stabilisation means it will no longer be subtracting from gross domestic product growth.

"There's no longer any population growth drag as has likely been the case in previous years (particularly 2013-2014)," he said.

Student, tourism boom also adding to growth

The bank said that, once short-term student arrivals which are not counted in the population figures are included, Australia is likely to be seeing a renewed GDP boost from population increase.

"While the ABS's measure of population growth includes foreign students studying multi-year degrees, it excludes students doing shorter-term courses of a year or less," the economists explained.

Graph of short-term student arrivals from UBS Photo: There has been a significant increase in short-term arrivals recently. (ABS; UBS)

"Yet, while tourist and business visitors (also excluded from the population measure) would rarely increase the demand for physical housing, appliances, utilities and the like, it is more likely short-term foreign students staying for a nine-10 month study course would.

"This suggests short-term students, while not truly 'population', could have a more significant positive impact on demand for goods and services in the economy, more akin to the resident population."

The UBS study also pointed out that a jump in tourist numbers due to the falling Australian dollar is also likely to be providing an economic boost, with a growing number of people now on Australia's shores at any point in time.

AustraliaPlus


 

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