A slowing and ageing Australian population

Stephen Roberts Chief Economist at Altair argues that “a slowing and aging Australian population helps to explain much about the speed limit for economic growth as well as the changing composition of spending. Growth in labour productivity has been quite weak over the past year. GDP per hour worked in Q2 2015 was up only 0.3% y-o-y. Growth in labour productivity has decelerated sharply over the past two years from close to 3.5% y-o-y for both definitions of productivity back in the 2012-13 financial year. We have also seen unusually slow population growth a significant reason for this is lower net overseas migration, 173,000 in the year to Q1 2015 compared with average annual change of 210,000 over recent years and close to 300,000 late last decade. Australia’s longer-term growth prospects seem more constrained than is widely appreciated. Unshackling the constraint needs a concerted effort to lift labour productivity and lift population growth.” Click the (VIEW LINK) to read the full article

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