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Aussie population growth hits 8½-year low
Most jobs added in Accommodation & Food Services
Population; Employment by industry

Population: Australia’s population increased by 357,000 people to 25,649,985 people over the year to March. Overall, Australia’s annual population growth rate eased from 1.45 to 1.41 per cent – the slowest pace in 8½ years. Natural increase (births less deaths) for the year to March was at 13½-year lows of 136,600 (down 4.9 per cent).

Annual population growth by state and territory: Victoria (1.77 per cent annual growth rate – slowest in 8 years), followed by Queensland (1.67 per cent), Western Australia (1.51 per cent – fastest rate in 6 years), Tasmania (1.12 per cent), NSW (1.09 per cent – slowest pace in 8½ years), ACT (1.07 per cent – slowest pace in 14 years), South Australia (1.02 per cent – fastest growth in 7½ years) and the NT (-0.38 per cent).

Employment by industry: In seasonally adjusted terms, employment rose by 421,800 in the three months to August. Jobs rose in 17 of the 19 major industry sectors, with the biggest gains in Accommodation and Food Services (up 129,400); Retail trade (up 59,500); Arts and Recreation Services (up 53,000) and Education & Training (up 52,800). But jobs were lost in Electricity, Gas, Water and Waste Services (down 14,200) and Construction (down 11,200).

Largest employers: Health Care and Social Assistance remains the biggest employer with 1.77 million employees (14 per cent of the total), followed by Retail Trade (1.24 million jobs or 9.9 per cent), Construction (1.16 million or 9.2 per cent) and Professional, Scientific & Technical Services (1.11 million or 8.9 per cent).

The demographic data on jobs provides insights on the job market, wages and prices, and ultimately on interest rates. The data on employment by industry gives insights into which industries are growing the fastest as well as insights on the performance of the broader economy.

What does it all mean?

• Aussie population growth was easing before the COVID-19 outbreak reached our shores with international borders shut to all non-citizens and non-residents from March 20. While today’s data only captures the pandemic’s impact over the last 11 days of March, annual population growth still hit 8½-year lows of 1.41 per cent at the end of March.

• Of course, the full impact of the loss of inbound migrants is already being felt across the economy. Net overseas migration – a key driver of population growth – plunged 12 per cent over the year to March. Farmers across the country are facing worker shortages – especially for fruit picking – with fewer migrant workers, backpackers and international student labourers available due to pandemic restrictions.

• Population growth rates eased across most Aussie states and territories in the year to March, led lower by major cities on Australia’s East Coast. Canberra’s population growth rate at 1.07 per cent was the weakest annual pace in 14 years. And annual growth rates have fallen to more than 8-year lows in Victoria and NSW.

• That said, ‘virus free’ states – South Australia and Western Australia – are experiencing a population resurgence. In fact, almost 18,000 people moved to the “Festival State” in the year to March with annual population growth of 1.02 per cent the strongest pace in 7½ years. And across the Nullabor, almost 40,000 more people called Western Australia home with the annual population growth rate of 1.51 per cent the strongest rate in 6 years.

• The coronavirus health crisis and the resulting economic lockdown have hit Aussie workers hard. More than 1.45 million Australians were claiming JobSeeker benefits as of July (latest data). The downturn has taken a huge toll on younger and older Aussies, females, casual and part-time workers, in particular.

• The Bureau of Statistics (ABS) payroll jobs data – released on Tuesday – showed that most jobs were shed in the Accommodation & Food Services and Arts & Recreation industries between March 14 (when Australia recorded its 100th confirmed case of COVID-19) and September 5. But with the re-opening of the economy after the first lockdown – and even including Victoria’s second lockdown in August – 129,400 Accommodation & Food Services jobs were either reinstated or created in the three months to August, according to ABS data released today. Also, 59,500 Retail Trade and 53,000 Arts & Recreational Services jobs were added over the period.

• Still, the impact of government restrictions – border closures and social distancing measures – on the hospitality and tourism industry is still evident. Over the year to August, 141,700 were lost in the Accommodation & Food Services industry.

What do the figures show?

Population Statistics – March quarter

• Australia’s population increased by 357,000 people to 25,649,985 people over the year to March. Overall, Australia’s annual population growth rate eased from 1.45 to 1.41 per cent – the slowest pace in 8½ years. Natural increase contributed 38.2 per cent to the annual lift in population with 61.8 per cent from migration.

• Over the year to March, population growth was strongest in Victoria (1.77 per cent), followed by Queensland (1.67 per cent), Western Australia (1.51 per cent), Tasmania (1.12 per cent), NSW (1.09 per cent), the ACT (1.07 per cent), South Australia (1.02 per cent) and the Northern Territory (-0.17 per cent).

• By state and territory, the ACT population growth rate at 1.07 per cent was the weakest annual pace in 14 years. NSW’s annual population growth rate of 1.09 per cent was the slowest pace in 8½ years. And Victoria’s population growth rate hit 8-year lows at 1.77 per cent.

• But annual population growth in South Australia (up 1.02 per cent) is the strongest in 7½ years. And Western Australian annual population growth of 1.51 per cent was the highest in over 6 years.

• Australia’s population grew by 113,900 people or 0.4 per cent in the March quarter.

• A net total of 220,500 people (3½-year low) migrated to Australia over year to March, down from 225,600 people in the year to December. Migration growth is down from the peak of 315,700 migrants in the year to December 2008. Net overseas migration was down 12 per cent over the year.

• There were 305,000 babies born in the year to March, down from 306,200 births over the year to December.

• And there were 168,600 deaths in the past year, up by 1,500 on the year to December.

• Natural increase (births less deaths) for the year to March was at 13½-year lows of 136,600, to be down by 4.9 per cent.

Industry Employment – August

• In seasonally adjusted terms, employment rose by 421,800 in the three months to August. Jobs rose in 17 of the 19 major industry sectors.

• Over the 12 months to August, 368,700 people have lost jobs. Around 12.58 million Aussies were employed in August, up from 12.16 million in May, but still down from record highs of 13 million in February.

• Over the three months to August the number of jobs rose by the most in Accommodation and Food Services (up 129,400); Retail trade (up 59,500); Arts and Recreation Services (up 53,000) and Education & Training (up 52,800). But jobs were lost in Electricity, Gas, Water and Waste Services (down 14,200) and Construction (down 11,200).

• Over the year to August, 13 out of 17 sectors shed jobs. The sectors that shed the most jobs over the past year: Accommodation and Food Services (down 141,700), followed by Administration & Support Services (down 72,800); ‘Other Services’ (down 67,700); and Transport, Postal and Warehousing (down 55,800). But the strongest gains were in Public Administration and Safety (up 65,900); Financial and Insurance Services (up 41,700); Agriculture, Forestry and Fishing (up 41,100) and Health and Social Assistance (up 29,900).

• Health Care and Social Assistance remains the biggest employer with 1.77 million employees (14 per cent of the total), followed by Retail Trade (1.24 million jobs or 9.9 per cent), Construction (1.16 million or 9.2 per cent) and Professional, Scientific & Technical Services (1.11 million or 8.9 per cent).

What is the importance of the economic data?

• Demographic Statistics are issued by the Bureau of Statistics each quarter. The figures include estimates of births, deaths, in-bound and out-bound migration movements and estimates of population change by State.

• The Australian Bureau of Statistics (ABS) provides detailed labour market figures one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.

What are the implications of today’s decision?

• Our population growth has long been one of the strongest amongst OECD countries. But Australia’s population boom is at an end due to the virus-enforced closure of our international borders.

• The Federal Government has announced that it expects net overseas migration – a key driver of population growth – to fall by around 30 per cent in 2019/20 and about 85 per cent in 2021/22.

• CBA Group economists forecast annual population growth to fall to 0.7 per cent over the period – the slowest pace since the unwinding of the ‘baby boom’ in 1971 and World War I – but most likely the slowest on record.

• Slowing population growth will have a significant impact on the labour and housing markets. Already, ABS data shows that 11,200 jobs were shed in the Construction sector in the three months to August – despite an easing of government restrictions outside of Victoria. With annual population growth expected to fall to around 180,000 in 2020/21, CBA Group economists forecast dwelling commencements of 148,000 in 2020 and 134,000 in 2021, down from 175,000 in 2019.

• These forecasts are at the lower end of the National Housing Finance and Investment Corporation’s recently released estimates for a fall in Aussie housing demand of between 129,000 and 232,000 homes with overseas arrivals down 214,000 over the next three years due to the pandemic.

Published by Ryan Felsman, Senior Economist, CommSec