Population growth returning to recent highs

• This week we focus on the latest population trends for Australia (full chart pack attached). Population growth has strengthened to a 1.5% y/y pace (or 349k people) in the four quarters to September 2016. According to the latest forecasts from the Department of Immigration and Border Protection, Australia’s population could  grow by more than 400k a year by 2020.

• Strong population growth provides a solid underpinning to GDP growth, but also presents challenges to government in providing necessary infrastructure as well as coordinating with the private sector to meet housing demand.

• Population growth is strongest in the non-mining states of Victoria (running at 2.1% a year or 128k new Victorians) and NSW (1.4% y/y or 110k New South Welshpeople). Strong net overseas migration continues to underpin population growth in these states.

• The other trend worth noting is a strengthening in net interstate migration to Victoria and Queensland and a net reduction in people leaving Tasmania. More people are leaving WA (following the mining investment unwind), while the traditional flow of people from NSW to QLD is beginning to pick up again.

• It’s a quiet week ahead domestically with the highlight being a speech Tuesday by RBA Deputy Governor Debelle. Internationally the focus will be on Europe where the UK is set to trigger formal Brexit negotiations on Wednesday. The important data are all on Friday with the Chinese PMIs and the US PCE deflator.

 Note: Attached to this week’s publication is our detailed slide pack covering the latest trends in Australia’s population.

For full analysis, download report

• Australian Markets Weekly: 27 March 2017 (PDF, 450kb)
• NAB Thematic: Population growth strengthens (PDF, 1MB)

For further FX, Interest rate and Commodities information visit nab.com.au/nabfinancialmarkets

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