DEMOGRAPHY: POPULATION FLOWS SHOWING SIGNS OF REBALANCING IN THE ECONOMY

Australia’s population rose by 396,000 or 1.7% in the year to December 2013. Net overseas migration remained the key driver of population growth, accounting for 236,000 people.

According to a recent ANZ Bank research report net overseas migration, however, has peaked and is likely to ease further going forward.

Indeed, net long-term international movements (a monthly indicator of net overseas migration) suggest that net overseas migration is likely to decline further in 2014 as investment in the resources sector winds down. Natural population growth (births less deaths) accounted for 0.7 ppts of the increase or 160,000 persons.

While Western Australia recorded the fastest population growth of any state or territory, the pace of growth has moderated in recent quarters.

Both net overseas and net interstate migration flows eased in both Western Australia and Queensland in the year to December, likely reflecting the deterioration in mining job opportunities in these states as mining investment declines.

In contrast, population growth increased in New South Wales and remained elevated in Victoria as net overseas and interstate migration flows picked up.

New South Wales’ share of total net overseas migration increased to just over 30% (the highest since June 2011), while net interstate inflows to Victoria rose their highest level in over 30 years.

Population growth remained very weak in Tasmania and South Australia (although it has improved recently), reflective of the softer economic conditions in these states.

Shifting population trends across states is consistent with the broader rebalancing occurring in the economy.

Population growth is slowing in the resource states of Western Australia and Queensland as mining investment declines, while a pick-up in international student arrivals and improving interstate migration flows are boosting population growth in New South Wales and Victoria.

Overall, these population flows provides further evidence that the tentative rebalancing in the Australian economy is occurring.

Source: ANZ Bank