G7 births hit new record low in 2012

Economic growth

SHARE THIS STORY

G7 in 2013The G7 group of countries are almost half (47%) of global GDP*.  They also have the highest incomes, and are therefore still the major driver for the global economy.  If we understand what is happening to their populations, we have a great insight in the key driver for demand, as we showed in ‘Boom, Gloom and the New Normal’.

The chart above is therefore the blog’s annual update of this key data, showing 2012 births.  It shows this data by age profile, so older people are to the right.

This highlights some important messages:

  • Across the G7, there was an enormous increase between 1946-70 in the number of babies born
  • This BabyBoomer generation was 15% larger than the previous cohort born between 1921-45
  • Crucially, the Boomers are also 16% larger than the generation born between 1971-2000
  • Even more importantly, the average Boomer joins the New Old 55+ generation this year

55 is a key age in terms of demand patterns.  It marks the moment when people’s spending begins to reduce, as they already own most of what they need, whilst their incomes reduces as they move into retirement.

In the past, of course, this cohort was not of great importance to the wider economy.  Even in the G7, life expectancy was only 66 years as late as 1950.  In the emerging economies it was only 44 years.   And generally speaking, people’s needs were very limited in their last few years of life.

The good news is therefore that life expectancy in the G7 has now risen dramatically to around 80, and to around 70 in the emerging economies.  This is a truly dramatic achievement.  But it also means a large number of people are now in the New Old generation for the first time in history.  And whilst their needs are larger than in 1950, they still represent a replacement economy and have to depend on pensions when they retire.

The chart also highlights how the number of G7 births hit a new record low in 2012 at 8.17m.  This was 200k lower than in 2011:

  • The US was unchanged at 3.95m, Japan declined to 1.03m, the UK was unchanged at 810k
  • France was unchanged at 790k, Germany declined to 670k and Italy to 530k, Canada was unchanged at 380k
  • By comparison, there were 10.1m G7 babies in 1958, when today’s 55-year-olds were born
  • 4.3m were born in the US; 1.7m in Japan; 1.2m in Germany; 870k in Italy and the UK; 810k in France; 470k in Canada

Increased life expectancy is a fabulous benefit.  But it has been accompanied by a similarly major fall in the number of babies being born to the average woman.  So today’s ‘population explosion’ is in fact a ‘health explosion’.

Demographics drive demand.  Today, around 40% of the G7’s adult population is thus in the New Old generation, and in their low-spending years.  This means economic growth will remain slow for decades to come.  Smart companies will instead focus on the new demand drivers of age and income, if they want to maintain growth for the future.

* G7 = USA, Japan, Germany, France, UK, Italy, Canada

PREVIOUS POST

Maersk's $3.7bn new ships investment underwater as global 'demographic dividend' ends

03/10/2013

The red line in the above chart from the Financial Times shows how far Eurozone ...

Learn more
NEXT POST

Most major financial markets have doubled since 2009 lows

07/10/2013

The period since March 2009 has been a wonderful time for most investors in the ...

Learn more
More posts
Financial markets head for (another) train crash as coronavirus starts to impact
17/02/2020

China’s industrial heartland of Hubei (pop 59m) and its capital Wuhan (pop 11m) have now been ...

Read
Coronavirus disruptions make global recession almost certain
11/02/2020

Last month, our Hong Kong-based pH Report colleague, Daniël de Blocq van Scheltinga, warned of the ...

Read
Your A to Z Guide to the Brexit trade negotiations
02/02/2020

A. Article 50 of the Lisbon Treaty set out the rules for leaving the European Union. As with most ne...

Read
Contingency planning is essential in 2020 as “synchronised slowdown” continues
12/01/2020

The IMF has now confirmed that the world economy has moved into the synchronised slowdown that I for...

Read
Boris Johnson will have to disappoint someone in 2020 as the UK finally leaves the EU
15/12/2019

Finally, after three and a half years, the UK has reached “the end of the beginning” wit...

Read
ACS Chemistry & the Economy webinar on Thursday
10/12/2019

Please join me for the next ACS Chemicals & Economy webinar on Thursday, at 2pm Eastern Standard...

Read
What’s next for Brexit and chemicals?
04/12/2019

The UK is about to go to the polls again to try and decide the Brexit issue.  Chemicals will be one...

Read
Global economy hits stall speed, whilst US S&P 500 sets new records
01/12/2019

Whisper it not to your friends in financial markets, but the global economy is moving into recession...

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more