Population forecasting in a post-2019 world
In an environment where the underlying drivers of population change are rapidly shifting, we have developed a forecasting model that can respond to new information while maintaining the rigour of demographic modelling.
TIMELINE OF UPDATES
What our forecasters have published and how they have responded to new information since August 2020.
02 THE FORECASTING CHALLENGE
How we have adapted our model to provide the best possible evidence base in a period of significant change.
03 THE BASE SCENARIO
In order to assess the impact of Covid, we must first understand what was likely to happen without it.
Timeline of updates
In August 2020, .id released new State and Territory forecasts for Australia, taking into account our best efforts at estimating the impact of Covid-19.
In these forecasts, Australia’s 2031 population was 229,000 lower than the pre-Covid view of the world. A preliminary set of SA4 forecasts for Victoria were prepared in September 2020, based on .id’s State and Territory forecasts.
Then, as part of the 2020-21 Budget, released on 6 October, the Federal Government released new short-term population forecasts. These forecasts for the next four years assume considerably lower levels of Net Overseas Migration (NOM) compared to previous estimates.
The Prime Minister, speaking at the National Press Club in May, had foreshadowed around 34,000 Net Overseas Migration to Australia for the current financial year (2020-21). With the announcement in the 2020-21 Commonwealth Budget, this outlook changed dramatically. These latest forecasts now assume NOM for the 2020-21 financial year to be -71,600. Negative NOM is also assumed for the 2021-22 financial year.
Australia’s NOM in 2018-19 was 239,700, meaning that the turnaround in NOM for this financial year results in around 300,000 fewer people in Australia compared to what may have been expected pre-Covid. The impacts of these changes on housing, education and many areas of our economy are hard to overstate. This drastic change alone warranted a review of our national and state and territory forecasts which has flowed on to an update of Victoria’s SA4 forecasts.
New State and Territory forecasts released for Australia.
Preliminary SA4 forecasts released for Victoria
Population forecasts released by the Dept. of Treasury with the 2020 Budget include a figure for Net Overseas Migration (NOM) for 2020-21 as -71,600.
November 2020 - January 2021
This change in NOM represents a significant change to the last stated information from the Federal Government regarding Overseas migration during the Covid-19 period - a core assumption in the model. This prompted us to revise our National and State/Territory forecasts to reflect this updated information.
A living forecast
Over the last two years, we have invested in developing a forecasting model that is both demographically rigorous and capable of responding to new data.
When new information becomes available that materially changes a forecast result, we know this may equally change the decisions you make. That's why we focus on reviewing our forecasts in the places that will be most impacted by Covid-19, and releasing these updated insights, along with analysis from our experts, to help you understand what has changed, so you can make informed decisions as you plan for the future.
Dramatic changes to Australia’s forecast assumptions such as those outlined above demonstrate how uncertain the impacts of Covid will be on our future population. This situation will continue to evolve as more economic and demographic data becomes available. Given the dramatic changes in these major assumptions, it is recommended that great caution be used when interpreting and applying forecasts. We are in the most uncertain times for forecasting in many decades.
The release of our latest forecasts for Victoria’s SA4s will provide an insight into our current thinking on the possible impacts of Covid on future populations. The influences on population changes in terms of economic and demographic drivers continue to be subject to change. It is intended that these forecasts will be updated as new information comes to light and as more detailed analysis of residential building activity is undertaken at the sub SA4 level.
THE BASE SCENARIO
What would Australia's population forecast look like without COVID-19?
A base scenario has been prepared to enable comparison to be made with the results of our updated forecasts.
This SA4 scenario updates our previous forecasts to 2019 base data, it includes our estimates of dwelling construction until the end of 2020/2021 and it attempts to ‘imagine’ the pre covid world of likely development locations. This forms the base on which to compare the effects of COVID-19.