Research & Analysis for Business
and Investment Clients
Business and investment growth relies upon increasing demand. Because supply increases as experience and manufacturing efficiencies drive unit costs down, demand is the key growth driver.
Population growth, in turn, drives demand growth. Estimating business and investment growth rates requires population growth estimates.
World population growth from 1950-2010 is shown in Figure 1.
Figure 1. World population growth from 1950-2010. Data are fit to a line shown in blue. Green lines are upper and lower 95% prediction limits.
United States population growth from 1950-2010 is shown in Figure 2.
Figure 2. United States population growth from 1950-2010. Data are fit to a line shown in blue. Green lines are upper and lower 95% prediction limits.
Based on Figures 1 and 2, here are the key points:
1. Population growth rates have minimal variation (convenient for forecasting population driven demand growth). As a reference, observe oil price fluctuations, which are highly variable.
2. A linear fit yields reasonable predictive value. Data residuals are unbiased (data suppressed). A linear fit may prove inaccurate if energy and food grow scarce or a communicable disease drastically alters population.
Recently released 2010 United States census data was compiled into an impressive infographic (embedded below). Use the data to understand how the US population has generally evolved since 1910. Data Source: US Census Bureau.