GS SUSTAIN: Demographics to Demand — Key Debates on Aging and Declining Populations and Impacts on Demand

In the latest installment of our Demographic Dilemma series, we address the key debates raised by investors on the implications of longer lifespans and lower fertility rates for product, industry, and company-specific demand. While population aging is not a new theme, investor questions are expanding beyond the labor supply debate to more specific impacts on product demand, growth and earnings. According to UN data, the core consumer population (35-55) is likely to have peaked in developed economies and is set to see an accelerated decline of 3 million (~-0.75%) p.a. starting in 2030, while retirees (65+) will experience continued growth of 4 million annually over the coming decade. At present, the implications of developed market fertility rates reaching a peak in 2007-08 are becoming more visible in education and vocational labor. Overall, we reiterate our view that aging and declining populations will play an increasingly important role in driving product demand. We continue to see