Population growth in Australia the lowest in a century

Like many demographers, I looked forward to the December 2020 release of quarterly population data with great interest. After nine months of minimal overseas migration, what effect would this have on population change? More frequent releases of data from the ABS have provided some insights, but this particular release, covering all of 2020 and all components of change, would provide the ultimate evidence base. My first reaction to seeing the data? Woah!

A one in one hundred year event?

The COVID-19 related demographic trends in Australia are quite rare in our recent history, perhaps occurring once every one hundred years. In the 12 months ended December 2020, the Australian population grew by 0.5% to reach 25.69 million. This was the lowest growth rate recorded since 1916, and represented growth of 136,300 persons. In terms of the volume, this was the lowest figure recorded since 1975. 

In 1916, Australia's population was just 4.9 million, and the growth of -1.0% recorded that year represented a loss of more than 50,000 persons. All states recorded a decline in population, except for the NT and ACT. The reason for the decline was a combination of troop movements out of the country due to WW1, as well as restrictions on civilian travel which impeded overseas migration. There was also a decline in population recorded in 1915 but it was in the order of around 2,300 persons. Since 1900, these two years are the only times that Australia has recorded population decline.

Overseas migration to Australia has facilitated strong population growth over many decades. There have been very few occasions when population growth has fallen below 1.0% per annum and this has generally been in times of economic recession. The 1930s was a time of great economic uncertainty, and population growth averaged 0.9% per annum. The last time Australia's population growth fell below 1.0% was in 1993, at the peak of the early 1990s recession.

Similarly, in recent decades it has not been common for Australia to record a volume of population growth below 200,000 persons per annum. The last time this occurred was in 1998, when the population grew by 195,610 persons. Since the 1970s, lower population growth has coincided with economic recessions, generally due to a lower volume of lower overseas migration. This occurred in the second half of the 1970s, 1983-1984 and 1992-1994. When jobs are scarce it has a dampening impact on long distance migration. 

Population trends in Victoria

The impact of the pandemic on Victoria was more profound than other states and territories. The prolonged lockdown in the second half of 2020 didn't just impact the economy and everyday life, it appears to have provided the impetus for massive demographic change. For most of the last decade, Victoria has recorded very strong population growth. This came to a crashing halt in 2020 when the state recorded growth of just 745 persons (0.01%). By way of comparison, the growth rate recorded in 2019 was 2.0% - the strongest in the country.

The components of population change are shown in the graph below. Pre-COVID, net overseas migration was the driver of population growth in Victoria, but a net loss was recorded in 2020 as thousands of international students and other visa holders left the country. Another major change was a net loss of population interstate, after several years of gaining population this way. Even though the net gain through interstate migration had been declining steadily since 2016, a net gain of more than 10,000 persons was recorded in 2019. As a result, the scale of change in 2020 (-12,740) was unexpected. What's more this trend was evident before the second lockdown, which suggest that other factors were at play.

Only a small gain in population via natural increase saved Victoria from recording a loss of population. Even so, the number of births declined by 6% in 2020, compared to 4% nationally. Interestingly, NSW and Queensland also recorded a decline in birth numbers, and, like Victoria, the decline was concentrated in the second half of the year. Whether this is a continuation of existing trends of declining fertility, or a response to COVID, remains to be seen. Although media commentary has speculated on the possibility of a COVID related baby boom, the evidence so far does not support this. It's also important to remember that babies born in 2020 were (on the whole) conceived prior to the onset of the pandemic. It's also possible that delays in birth registrations may have played a role.

Population trends in Queensland

In 2020, Queensland recorded the strongest population growth rate (1.1%), but even this was lower than in previous years. The volume of growth was 58,110, compared to more than 87,000 persons in both 2018 and 2019. In recent years, Queensland's population growth has been increasing, mainly via increasing levels of migration from other states, and from overseas. Like other states, overseas migration was wiped out by the international border closure, with a net loss of 24 persons.

The chart below shows the components of population change in Queensland.

Queensland's population growth was driven by a combination of net interstate migration and natural increase. Gains from net interstate migration have long been a feature of population growth in Queensland. However the net gain averaged less than 10,000 persons per annum between 2009 and 2015. In recent years the net gains have been steadily increasing, reaching 30,000 for the first time since 2004. Natural increase was more stable, but has generally been declining since 2014. 

Other states and territories

What other notable trends are evident in the latest population data?

• Western Australia is now gaining population via interstate migration, first time since 2013
• despite the closure of the international border, net overseas migration was recorded in NSW, WA, SA, NT and Tasmania  
• Northern Territory once again recorded population growth (1,340 persons, 0.6%) after two successive years of decline.

Concluding comments

Current population trends are primarily due to the closure of the international border. At the time of writing, the Commonwealth government has not committed to its reopening, so it's likely that low levels of population growth will continue for the foreseeable future. The next data will be for the year ended March 2021 - a full year after the closure of the border. Will Australia record negative growth? Will the level of natural increase be enough to maintain some level of growth? Is this a one in one hundred year event, or will demographic trends start returning to normal? Watch this space!