While Australia’s birth rate continued to slide during the height of covid-19 and immigration came to a halt, a portfolio manager at Martin Currie has recently been studying pre-natal medical records.
Against a worldwide trend, and Australia’s multi-year pattern, the early indicators are that the rate of natural population growth is set to pick up.
At a chance encounter with another parent, an obstetrician, at a school function in March this year, Ashton Reid, was surprised to hear that he had been unusually busy in recent months.
Reid, a portfolio manager for real assets in Australia, started to wonder whether this was a broader trend. He writes in a blog published last week (May 20), Forecasting Baby Showers for Australia’s Population Growth’:
“Looking further into all things baby related, it became evident that in strong contrast to other parts of the world, Australia is set to enjoy a coming baby boom. While it would be easy to flippantly attribute this great baby news to lock-downs and the thought that one can only watch so much streamed TV, in reality it means so much more.”
Reid says that the coming baby surge speaks volumes to the great levels of shared optimism in Australia’s ongoing prosperity, given the sign of confidence to commit to baby plans and the knowledge that a strong birth rate delivers long-term structural benefits.
This population growth is also good news for the long-term success of real assets. Quite simply, the more the Australian population grows, the higher demand for real assets serving our everyday needs,” he says, paying due regard to his day job.
Reid delved into statistics which were foreign to him: early stage (less than 16 weeks) pregnancy ultrasound referrals, sourced from Medicare at the end of March, 2021.
They indeed showed a strong rise between January and March, hitting the highest point for about 20 years. The March 2020 ultrasounds were up 20 per cent on pre-covid ultrasounds in March 2019. There was also a jump in the year-on-year numbers for “total services used” which were the highest since 2006 prior to the GFC.
Reid says: “Unlike behaviours that saw a sharp drop in births during the GFC, government Medicare data on early-stage pregnancy ultrasounds is signalling a mini baby boom on the horizon.”
There are only two ways a country can increase its GDP: productivity growth and population growth. Australia has long relied primarily on the latter, with immigration typically providing about half the population growth and “natural sources” the other half.
Reid says: “Population growth from both the natural birth rate and immigration are key driver of the real assets we invest in for our income clients, and we remain very confident in the long-term Australian population story.”