With life expectancy rising as birth rates fall, there has been much talk about ageing populations – particularly in developed markets – and the marked impact this is having on a number of sectors and industries.
Shifts in demographics are likely to have pronounced effects across economies, with the potential to affect a multitude of sectors and products, so are critical areas to track from an investment perspective.
Leaving aside health care as one obvious beneficiary of an ageing population, sectors which are likely to be influenced by this demographic trend also include home improvements and housing. With a high proportion of retirees unwilling to move into retirement homes and preferring to ‘age in place’, it is reasonable to assume some future government policies may recognise this, with implications for housing and beneficiaries of home-improvement spending.
Travel is another likely beneficiary of an aged population. In the US, Europe and the UK, over-65s are travelling more, for longer durations and are increasingly spending more than other age cohorts per trip.
Ed Geall, thematic analyst, Newton Investment Management.