Our friends at the U.S. Census Bureau have just released some projections for America's population growth over the next 50 years. The rate at which our population grows has some important implications for American businesses and stocks. But first, take a gander at some of the specific projections:
- The U.S. population is expected to grow by 49% between 2000 and 2050, increasing from 282 million to 420 million. This is considerably slower than the 87% growth experienced between 1950 and 2000, but compared with much of Europe, which will likely experience headcount declines, our growth will be welcome.
- By 2030, roughly a fifth of all Americans will be age 65 or older, making our nation grayer than it is now.
- By 2050, non-Hispanic whites will make up roughly half the population (down from 69% in 2000), with Hispanics having increased their proportion from 13% to 24%, African-Americans rising from 13% to 15%, and Asians growing from 4% to 8%.
So what do these expectations mean for us investors? Well... here are a few possibilities:
- With Hispanics making up a quarter of our population, businesses will increasingly find it worthwhile to market to Hispanic consumers. Fluency in Spanish will likely become an increasingly valued skill in the workplace.
- With the population growing more slowly, many businesses will find it hard to sustain their growth rates. General Motors
(NYSE:GM), for example, relies on new young drivers coming of age each year: There will likely be fewer of them in the future. Similarly, Procter & Gamble (NYSE:PG)will have fewer babies' bottoms to cover in diapers in the years ahead.
- Businesses serving the elderly have reason to smile. For example, health care-related firms such as Johnson &Johnson
(NYSE:JNJ)and Medtronic (NYSE:MDT)should see increased demand, as should nursing home operator Manor Care (NYSE:HCR)and RehabCareGroup (NYSE:RHB).
- The body of workers in America will also grow more slowly; therefore, so will income tax revenues. This won't help Social Security, Medicare, and the like. Governments may have to find new ways to support services for the elderly and the rest of the population as well. The silver lining is that there may be less competition for jobs, and with a tighter worker supply, workers might have more power to negotiate better pay and benefits.
Longtime Fool contributor Selena Maranjian owns share of John son & John son.