Mapping the Future: How Australia’s Population Shifts Can Drive Business Growth

Population dynamics play a critical role in shaping market demand, labour supply, and the allocation of resources. For businesses, understanding these trends by age and region is essential for making informed strategic decisions.  

Insights into population growth can guide where to open new locations, how to tailor marketing efforts, what products to develop, and how to manage workforce needs effectively. 

The Australian Bureau of Statistics (ABS) provides comprehensive population projections that offer valuable insights into these dynamics. Based on the latest data released in April 2024, Australia’s population is currently around 27 million and is projected to increase by 3.5 million over the next decade.  

While overall population growth is a positive economic indicator, the real value lies in understanding the specifics of where and among which age groups this growth will occur. 

The population in Australia’s capital cities, including Canberra, is expected to rise from 18.2 million in 2024 to 20.7 million by 2034. In regional areas, the population is projected to grow from 8.7 million to 9.8 million during the same period.  

These figures highlight a significant urbanization trend, but they also underline the continued growth of regional areas, driven in part by pandemic shifts such as the rise of flexible working conditions and availability of more affordable housing options outside major cities. 

The population of young children (0 to 9 years) in capital cities is expected to decrease by about 4%, while regional areas may see a substantial 19% increase.  

This suggests that while urban centres might face a stabilization or slight decline in demand for early childhood services, regions could experience a boom.  

Businesses in regional areas should focus on expanding childcare facilities, early education centres, and family-oriented amenities to cater to this growing demographic. 

The 10-19 age group is projected to grow by 10% in capital cities but decline by 8% in regional areas. This demographic is heavily involved in secondary education, extracurricular activities, and sports.  

Urban areas will see a rise in demand for educational services, private tutoring, sports facilities, and related retail, while regional businesses may need to adjust to a shrinking market in this segment. 

Young adults (20-28 years), typically students or early-career professionals, are set to increase by 16% in cities and 22% in regions.  

The surge in young workers is vital for the labour market, especially as the workforce faces the challenge of replacing retiring baby boomers. Businesses should capitalize on this by offering affordable housing, entry-level job opportunities, and social infrastructure that appeals to this demographic. 

Adults (29-39 years) are expected to decrease by 8% in cities but increase by a remarkable 32% in regional areas. These individuals are often in the family formation stage, driving demand for housing, schools, and family services.  

Regional areas stand to benefit significantly from this demographic shift, which will stimulate local economies through increased demand for both small businesses and larger infrastructure projects. 

Both urban and regional areas will see growth in middle-aged adults (40-52 years), with increases of 19% and 23%, respectively. This group typically includes established professionals and families with higher disposable incomes. Opportunities abound in sectors such as premium real estate, health and wellness services, and executive offerings. 

Pre-Retirees and Retirees (53-67 years) are expected to decline in regional areas while increasing by 16% in cities. Businesses catering to this demographic, such as estate planning, retirement services, and lifestyle-oriented products, should focus more on urban centres, where the demand is likely to be stronger. 

The senior population (ages 68+) is projected to rise by an astounding 50% in capital cities and 12% in regional areas. This aging demographic will drive growth in healthcare services, retirement communities, and age-specific recreational activities.  

Businesses in these sectors, particularly those in metropolitan areas, should prepare for increased demand and opportunities for expansion. 

For businesses, understanding these demographic shifts is crucial to staying competitive. Whether it’s expanding in regions with growing young families or targeting urban centres with services for seniors, aligning business strategies with population trends can lead to sustained success.  

Additionally, further data on income, ethnicity, and workforce trends will provide even more granular insights, enabling businesses to fine-tune their approaches and capture emerging opportunities effectively. 

As Australia’s population dynamics continue to evolve, staying informed and adaptable will be key to long-term success. Businesses that can anticipate and respond to these changes will be well-positioned to thrive in the coming years.

Hari Hara Priya Kannan is Data Scientist at The Demographics Group