The Population Growth Recovery

I have had a fascination with U.S. population numbers since I had to write a paper in high school about how population growth affects our economy. That was 55-plus years ago, and I have continued to watch the topic with great interest.

Much has changed since the late 1960s, and sometimes demographers miss the boat as they have in the last decade. Why does this matter? Because population, and its inherent growth in the United States, is the driver for all forms of construction needs to support that growth, from housing to commercial structures of all types, and streets, roads and bridges, all of which are pull-throughs for aggregate production and consumption.

In the 1960s. The Baby Boomers in the 1960s were adolescents and college students, as fathers came back from World War II, married their sweethearts and started families – and mostly larger than the family units of today. That led to much study on the issue of population growth and gave rise to a popular book published in 1968, “The Population Bomb,” written by noted Stanford University professor Paul Ehrlich.

It frightened our parents’ generation as he predicted population growth globally was so out of control, we would witness mass famines and starvations in the 1970s, as well as other major societal upheavals, and advocated immediate action to limit population growth. Of course, the book has been criticized for inaccurate assertions and failed predictions.

Mass famines never occurred, particularly as population growth moderated globally. The American family shrank as women entered the workforce in droves over the last third of the 20th century. Back in the Baby Boom years, it was not uncommon to see families with four to six children, or even more, and today, that number has fallen to 1.94 children per family.

All the major prognosticators of population growth, starting with the U.S. Census Bureau, have been consistent in their overly optimistic projections about our population growth. Real numbers regularly fall short of projections, which is a drag on construction demand.

This is particularly true during the Covid pandemic, which completely derailed population growth projections for the early years of the new decade, as growth ground to a near-halt in 2021 at 0.1%, the slowest population growth rate since the nation’s founding. And that reflects the tail end of a steady downward trend in growth percentage that started in 1990.

Turning the Corner. But recently, new figures show that we have turned the corner, and in a big way. According to the U.S. Census Bureau’s latest estimates, the U.S. resident population grew by 3,304,757 to a total population of 340,110,988. The population grew at a rate of 0.98%, the highest rate since 0.99% in 2001. This also marked the third straight increase in the growth rate of the U.S. population.

The Census Bureau reports that the primary source of population growth was net international migration (immigration), as international migration levels once again were higher than the previous year, as the level of net international migration between 2023 and 2024 totaled 2,786,119.

The second component of population growth is natural growth, which represents births minus deaths. Births totaled 3,605,563, down slightly from last year, while the number of deaths was reported at 3,086,925, also a decrease from last year. The natural growth, therefore, between 2023 and 2024 was 518,638.

Each region in the United States experienced population growth for the 2023-2024 period. The South led in population growth at 1.34% followed by the West at 0.85%. Meanwhile, the Midwest population grew 0.75%, while the Northeast grew the least at 0.59%.

Of note, the growth occurred in the most obvious states, with Washington, D.C., leading the way with the highest growth rate at 2.13%. Florida was second with population growth at 2.00% followed by Texas at 1.80%. Numerically, Texas experienced the largest population increase, gaining 562,941, followed by Florida at 467,347 and California at 232,570.

Population growth drives aggregate consumption. This return to strong growth numbers bodes well for our industry.

AVP Index. The Index line falls back to its flattened state, as we witnessed a decline of 0.1% over last month. This was driven by some major drags on the algorithm, including continued profit-taking in the Industry Stocks metric as investors rotate out of that hot sector (-8.0%). Other downdrafts occurred in Housing Starts (-1.8%) and the Construction Backlog Indicator (-1.2%). But strengthening in other indicators bodes well for the months ahead, as the Dodge Momentum Index made an incredibly strong leap (+10.2%) along with Construction Confidence Index (+0.3%). Notably, the Pulse Index is up 5.9% year-over-year, and a very respectable 11.4% over the past 36 months.

Pierre Villere

Pierre G. Villere serves as president and senior managing partner of Allen-Villere Partners, an investment banking firm with a national practice in the construction materials industry that specializes in mergers and acquisitions. He has a career spanning almost five decades, and volunteers his time to educate the industry as a regular columnist in publications and through presentations at numerous industry events. Contact Pierre via email at [email protected]. Follow him on X @allenvillere.

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