I’m doing PR for my new book, The Demographic Cliff, in Australia at the moment. Last week, I was in Sydney, and tomorrow until Sunday, I’ll be in Brisbane, speaking at the “Secure the Future” conference.
I always tell Australians that, despite my grim worldview for the next six to 10 years, they will weather the next great global financial crisis better than anyone else.
If I could live in any wealthy, English-speaking country, it would be there.
Because of its demographics, and it’s a very civil society!
The truth is that, with the lower birth trends that come from increasing urbanization, wealth, and education, almost all developed countries have sideways (at best) to falling demographic trends for decades to come.
But there are a few exceptions…
And they are, in order:
- New Zealand.
These guys are the world’s Fab Five. They’re the few wealthy countries or “marginal growers” (I’ll explain below) that have positive demographic trends in the future, largely thanks to their higher immigration rates and higher birth rates (encouraged by greater maternity benefits for working women).
Unfortunately, in the great scheme of things, the Fab Five are smaller countries.
Australia only has a population of 23 million people. Sweden has 9.5 million people. Denmark: 5.6 million. Norway: 5 million. And New Zealand: 4.5 million. All of these countries combined, are only a little larger than California.
Ultimately, with the demographic trends I see ahead, I expect the developed world will split into three segments in the future:
Segment #1: The marginal growers — the Fab Five.
Segment #2: The sideways survivors — the U.S., Canada, France, and the U.K.
Segment #3: The shrinkers — Japan, Germany, Greece, Portugal, Austria, Switzerland, Italy, Spain, South Korea, Taiwan, Singapore, East Europe, Russia… and even China, after 2025.
Almost all of the demographic growth between 2023 and 2070 will come from emerging countries that are still urbanizing and generating middle-class consumers, albeit not nearly as affluent as their developed-world counterparts.
The sideways survivors will remain relatively steady, thanks to their once-higher immigration rates and birth rates (although the latter is now in decline), and their still-high productivity.
Of the group, the U.S. and Canada will fare better than the U.K. and France in the decades ahead because of their higher productivity and the fact that they’re less dependent on the great shrinking vortex of Europe.
The shrinkers face sharply declining demographic trends in the decades ahead, a reality made worse by their particularly low birth rates and immigration policies. How do you grow when both your workforce and population are declining?
But let’s get back to the Fab Five. Look at the Spending Wave for Australia below:
As you can see, Australia sees flat trends between 2010 and 2015, after which it’ll be the only developed country with slightly positive trends into 2018.
In the next global boom, from 2025 to 2035, Australia will have the strongest surge of any developed country. After that, it’ll see a minor downtrend into 2045. But then another boom is likely into around 2065 to 2070… although falling births and immigration, over the next decade, could compromise that trend a bit compared to this projection.
Right now, Australia has the highest immigration per capita of any major, wealthy, developed country. It’s greater than even Canada or the U.S., which are immigration magnets. And it could continue to enjoy good immigration levels at times, even in the coming depression, as the wealthy flee countries like China.
The bottom line is that Australia simply has the best demographic trends of any wealthy, developed country.
The second of the Fab Five is Norway, with its high oil revenues that could reverse on it in the next decade. Norway sees a plateau top between 2015 and 2020, and then a minor downturn in demographic trends into 2025. Then it booms, albeit a bit less than Australia, into 2040.
Sweden, our #3 of the Fab Five will endure a bigger downturn between 2015 and 2025 than Norway, but then has a pretty sharp spending surge into 2040.
New Zealand comes in at #4. It has a larger downturn between 2010 and 2025, and a good surge into 2040. Its demographic trends are largely flat for a while after that.
Denmark is the last of the Fab Five, with a sharper downturn between 2015 and 2030 before stronger upward trends into 2040.
Like the sideways-survivors, U.S. and Canada, Australia and New Zealand should fare better in the decades ahead because they’re positioned close to the Pacific Rim and Asia, which should be the greatest overall growth region in the decades ahead.
While I hate to inform the Australians that the China and commodity bubbles will hit them harder in the next global financial crisis, as will their very over-priced real estate, I will say that no country has lower government debt or is better positioned for the next boom around 2023 to 2036 (or later).
That’s when we could see the greatest commodity boom and bubble in history, as emerging countries dominate growth. And Australia, with its strong commodity exports, is perfectly set to ride the wave.
|Follow me on Twitter @HarryDentjr|
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