In 2013, there were fewer births in the G7 countries – responsible for nearly 50% of the global economy – than in any year since the Great Depression year of 1933.*
As the chart also shows, 1933 was an exception. Births bounced back immediately afterwards. But the low figure in 2013 is part of the declining trend seen since the end of the 1946 – 1970 G7 BabyBoom (yellow highlight). It is almost certain that 2014 or 2015 will see an all-time low being reached.
This has major implications for the global economy, as common sense tells us that future economic growth depends on the number of babies being born. There would be no global economy if there were no people on the planet.
Overall, G7 births have fallen by nearly a quarter since their 10.6 million/year peak to today’s 8.1m/year:
- US births have fallen 3%, despite major Hispanic and other immigration (dark blue)
- Japanese births have fallen 29% (red) and UK births by 17% (green)
- German births have fallen 33% (orange) and Italian births have fallen 34% (purple)
- French births have fallen 8% (light blue) and Canadian births 12% (brown)
And of course, the same downward trend is underway in most countries outside the G7.
In China, for example, the number of babies in the 0 – 4 age group has collapsed by 30% from 131m in 1970 to just 85m today. Its fertility rate is just 1.4 babies/woman, leading China’s Academy of Social Sciences to warn “History shows that no country that slips into this trap returns to the replacement level.”
Overall, only the very poorest countries are still seeing an increase. India for example, with GDP/capita of just $1500, is typical of those countries where births are still increasing.
The reason for this alarming outlook is simple, as the German statistical office explains:
“The number of births is highly dependent on the number of women aged between 26 and 35, as they have the highest fertility rates. As, however, the number of potential mothers between 26 and 35 years has decreased substantially, the number of births has fallen.” And they add a further note of caution, pointing out that “the number of births will only remain stable in the long term if fertility increases“.
Recent data also shows few signs of fertility rates increasing at the moment, as I discussed in October. Contrary to popular belief, the world is probably already below the 2.1 babies/woman level that represents replacement level. Thus it is most unlikely that the global population will ever reach the widely expected 9bn level in 2050.
In turn, as we argued in Boom, Gloom and the New Normal, this means global economic growth will never return to the Boomer-led SuperCycle level in our lifetimes.
* Birth records for the full G7 begin in 1921, as shown in the chart