Ageing population to change business

Healthcare, housing construction and personal finance sectors are the winners in a new population report that lists an ageing population and growing migration as the biggest demographic changes.

The inaugural PKF Business & Population Monitor examines the effect of demographic changes on Australian business.

The report highlights that the proportion of the working-age population is expected to nosedive in the next five to ten years and the ratio of over 65s to the 15 to 64 age group will almost double over the next three decades.

"These will be the largest structural shifts in the Australian economy since World War II," PKF national chairman Chris Allen said.

"Those firms that get ahead of coming trends are most likely to profit, the ones that fail to recognise and adapt to the impending demographic shifts will be left behind."

While spending on clothing, cars and entertainment falls once a worker retires, more money is spent on health insurance, gambling, books, home improvement, electronics and travel.

The report said investment in retirement villages and aged care accommodation would continue to grow. Construction of aged care facilities topped $1.4 billion in 2007, up 38 per cent on the previous year.

Businesses involved with health care were likely also to benefit from an ageing population.

"Significant investments in health-care technology are required to meet the demands of the aged, who wish to maintain quality of life into their senior years and are generally prepared to pay to get it," Mr Allen said.

The report also says businesses benefit from retaining mature-age workers.

"Almost half of the increase in retail sales in the next decade will be to customers aged 60 and over," he said.

Mr Allen said mature-aged staff selling to mature-aged customers may put a business at an advantage.

Population growth from skilled migration and a "mini baby boom" were likely to continue to fuel the booming "sun belt" states of the Northern Territory, Western Australia and Queensland.

The PKF report said growth in the sun belt jurisdictions was running ahead of the five-year average as their economies rode the resources and investment boom and showed no signs of the slowing.

The PKF report said the Northern Territory was a standout because it had the nation's highest birth rate and attracted most of the migration from within Australia.

The report said the economic tide appeared to be turning in Victoria, pointing to risks across a range of industry sectors that may not be fully evident until 2009.

"The trend of population flowing out of Victoria poses potential risks to the local economy and businesses," Mr Allen said.

"This is not an immediate risk to local business growth and prosperity but longer term it will slowly be revealed over time."

South Australia and Tasmania's particularly low growth rates and rapidly ageing populations would create significant pressures to provide infrastructure, services, public health care and housing for the aged.

The report said population growth would be a boom for housing construction because of higher demand for new homes.

PKF said its data pointed to a spur in housing construction in the second half of 2009, and migrants were expected to buy more property than existing residents.

"The first challenge for businesses is recognising that these opportunities exist," Mr Allen said. "The second is to then do something positive about it."