What impact will COVID-19 have on population growth?

There’s no doubting that the COVID-19 virus and its rapid spread around the world has greatly impacted our lives.

To date, much of the public discourse around COVID-19 has focussed on economic and health issues.

Of course there are good reasons for this, but what impacts will there be on population change?

What trends will there be in a post COVID-19 environment?

Much of the answer lies in the length of time Australians are subject to COVID-19 restrictions, and this blog explores my thoughts on this issue.

How populations grow and change

It’s always worthwhile stepping back and reminding everyone about the components of population change.

Natural Increase (births minus deaths) and migration (both interstate and overseas) explain how populations grow and change.

Australia’s strong population growth in recent years has been driven by higher levels of net overseas migration (NOM).

In 2018-2019, NOM comprised 62.5% of population growth in Australia – the remaining 37.5% was natural increase.

There are spatial differences in how the components of population change play out across Australia’s states and territories.

For instance, Sydney and Melbourne receive the bulk of overseas migrants moving to Australia, so changes in the volume will disproportionality affect population change in those cities.

Similarly, some states gain population through interstate migration eg Queensland, while others lose population to other states eg NSW.

The balance between births and deaths is important, particularly at the local level.

Overseas migration

Levels of NOM have been historically high in recent years and in 2018-2019 it reached 239,600.

However, the travel restrictions imposed as a result of COVID-19 will almost certainly reduce the level to numbers not seen for many decades.

Only certain categories of people, such as Australian citizens, permanent residents and some others, are currently allowed to enter Australia.

Putting on my Captain Obvious hat for a moment, this is a major barrier to migration.

The overall impact will depend on the length of time the restrictions are in place.

The impacts will be felt in those parts of Australia where NOM comprises a large proportion of growth, such as Sydney and Melbourne.

Even Tasmania’s recent growth surge is partly driven by NOM, so it’s likely the current growth phase will come to an end.

Another factor to consider is the number of people leaving Australia.

Pre COVID-19, Australia was home to a large number of international students, working holiday makers and skilled visa holders.

Depending on the length of time they reside in Australia they can be included in the resident population.

These people may leave Australia, especially if they can’t support themselves financially.

Only this week the Victorian government announced measures to support international students, recognising the contribution education makes to the economy.

The impact of this remains to be seen but it is likely to mitigate the loss of students out of the country.

It’s unlikely that all movement in and out of Australia will stop, but the balance between arrivals and departures will be interesting to see.

Will Australia reach a situation where we have negative NOM? While recognising that categories of movement change over time, ABS data shows that the last time Australia recorded more permanent overseas departures than arrivals was in the last years of WW2 – and this didn’t include troop movements!

The ABS releases population data each quarter, but the COVID-19 impacts will not be seen in the numbers until later in the year when the 2020 March and June quarter data is released in September and December respectively.

In the meantime, other data has been progressively released which provides an indication of the full impact.

For instance, passenger number data released by Melbourne Airport for March 2020 indicates a 47% decline in international passengers compared to March 2019.

The ABS’s monthly Overseas Arrivals and Departures collection showed a massive decline in short-term arrivals in March.

Although not all of these people end up as part of the resident population, it does show a dire trend.

Watch this space when the April 2020 data is released in a few weeks.

Interstate migration

The impacts on interstate migration are less certain as the numbers are not captured in the same way that overseas migration is.

To complicate matters, some states have closed their borders, and others have not imposed such measures.

Regardless, movement between states is likely to be reduced.

With regards to states that have closed their borders, movement is restricted and quarantine periods apply.

While these restrictions will obviously hamper short term moves such as holidays, the impact on permanent movement remains to be seen.

For example, the Queensland government says that people moving to the state can still do so, but have to self-isolate for 14 days.

This means that interstate migration is still possible but it’s still likely to be lower than in past years.

Again, the length of time will influence the overall impact.

Some people may simply delay a move interstate until there is more certainty.

Interstate migration trends differ from state to state so there will be spatial impacts.

Queensland, which typically records the highest gains from interstate migration, is more likely to feel the impact of restricted movement.

On the other hand, states that typically lose population interstate, such as NSW, may record a decline in these losses.

There is a lot of uncertainty as to the impacts but it will be interesting to see how trends evolve.

Tasmania’s recent growth surge is partly attributable to increased interstate migration.

It will also be interesting to see if the net interstate migration loss from WA (a hangover from the end of the mining boom) is reduced.

Intrastate migration is another factor to consider and is particularly important at the local level.

People are still free to move around with our cities as removalists are considered to be an essential service.

To what extent this differs from past trends remains to be seen, and population data for LGAs, SA2s and other local areas is not likely to be available until March 2021.

In the meantime, data on residential building and construction activity will provide an indication as to the demand for new housing and the potential impacts on population change eg monthly building approvals data from the ABS.

Natural increase

Australia records more births than deaths so the population will continue to grow in the absence of NOM – albeit at a lower rate.

The question is more around the impact of COVID-19 on birth and death numbers.

To date, Australia has been fortunate not to experience a large number of deaths on the level occurring in countries such as the USA or UK.

As of 1 May 2020, there are less than 100 COVID-19 deaths in Australia.

This is a small proportion of the total number of deaths each year (160,600 in 2018-19).

Granted, there is still a long way to go before the pandemic is over.

But assuming case numbers remain low, the number of COVID-19 deaths will not create a spike in the data.

Many people have asked me if there will be a baby boom as a result of self-isolation in Australia.

The simple answer is no and at any rate, we won’t see any impact on birth numbers until 2021 and beyond.

If history has shown us anything, depressed economic conditions and extreme societal change has a downward impact on fertility rates.

The 1930s and early 1940s are a prime example, when depressed economic conditions and a world war did little to encourage child bearing.

However, lower levels of NOM will result in a decline in birth numbers.

The increased level of overseas migration in the last decade has roughly corresponded with an increase in birth numbers.

This is because many overseas migrants are in the family forming age groups, and many start, or extend, their families after arriving in the country.

Fewer overseas migrants will result in fewer children being born, and the reduced number of births, coupled with limited changes in the number of deaths, will result in a lower level of natural increase.

This will have a greater impact states with an older population such as Tasmania and South Australia.

Summary

This blog has been a collection of my thoughts on how the COVID-19 pandemic might influence population change in Australia. Some impacts are more obvious than others, particularly the restrictions on overseas arrivals which are highly likely to have a major impact on NOM.

Natural increase is also likely to decline as a result of fewer births, but the full impact won’t be felt until 2021 and beyond.

Interstate migration impacts are less certain as official statistics are not available.

The extent of the demographic impacts will be highly dependent on the length of time the COVID-19 restrictions are in place.

Watch this space for analysis on the data as it is released in the coming months.

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from Property UpdateProperty Update https://propertyupdate.com.au/what-impact-will-covid-19-have-on-population-growth/