#167 - Demographics Tell The Future

"Between July 1, 2020, and July 1, 2021, the nation’s growth was due to natural increase (148,043), which is the number of excess births over deaths, and net international migration (244,622). This is the first time that net international migration (the difference between the number of people moving into the country and out of the country) has exceeded natural increase for a given year." - Census.gov

Happy New Year to everyone!

This week, I wanted to share a couple links that illustrate two meaningful trends to watch in the 2020's and beyond: decentralization away from blue states / cities to red(der) states with attractive Tier 2 cities and a slowing birthrate. Demographics are waves that swell, then break - either ride the wave or get out of the way!

The first link is to Census data from the 2010-2020 decade showing that large cities increased in population, but that the US increased its population at the slowest rate since the 1930's. (This is not particularly good news for future transfer payments to retiring boomers or their children or children's children). As expected, the largest metropolitan areas enjoyed some of the largest increases on absolute terms - both blue and red states / cities. New York and LA gained hundreds of thousands, but so did Houston, Phoenix, and Salt Lake City over the decade.

That is, until the Covid-19 pandemic began in 2020, which reversed the course of many blue cities and states including New York, Illinois, California, and Michigan. Take a look at this link that estimates growth and decline in various states and cities from 2020-2021. You'll notice one thing: people are voting with their feet and leaving left leaning states in large numbers for smaller cities in red(der) states. This will be interesting to watch over the coming decades as some of the traditionally red states may become a bit more purple in hue going forward. As an aside, I was pleased to see North Carolina come in at #4 on the absolute population growth metric.

I will refer readers back to Raoul Pal's discourse on the macroeconomic history of the 20th century to reinforce the point that demographic trends often take decades to play out, but they have massive social, political, and economic implications on the future. Pay attention!

Links:

The $900 Billion Cash Pile Inflating Startup Valuations (WSJ)

Population growth and decline by state in 2020 (Visual)

Executing a Construction Services Roll-Up with Bruce Young, CEO of Concrete Pumping Holdings, Inc. (NASDAQ: BBCP) (Compounders)

Lex Fridman interviews Elon Musk on SpaceX, Mars, Tesla Autopilot, Self-Driving, Robotics, and AI (Lex Fridman Podcast)

Visualizing 2022: Trends to Watch (Council on Foreign Relations)

Great thread on why we are where we are in the current macro real estate cycle (Twitter)

The platform economy: why these businesses matter (Sparkline Capital)

The global semiconductor value chain (Link)

Tom Whitwell's inaugural lessons learned in 2021 (Link)

The platform economy (Sparkline Capital)