how does the decline of a countries population affect businesses in that country?

Question

any pointers that i can work with even if you can only think of a view bullet points i would be really grateful, or any links...

Answer 1

- Most businesses expect to grow their business from year to year. This may be impossible in a time of declining consumer base, and companies may see declining sales. This may cause them to be unprofitable long term, as the declining sales don't bring in enough revenue to cover fixed costs, depreciation, etc

- For long-existing corporations that have pensions, it can cause huge problems in that there will be neither enough sales or current employees to support the pension obligations for old retirees.

- A shrinking population almost certainly implies a changing demographic mix to more old people vs fewer young people. This itself will create different market opportunities.

- With fewer young people, business will likely experience labor shortages, resulting in declining sales and missed market opportunities.

- As a response to labor shortages and more retirees not producing, business will likely see better productivity per hour and per worker; but the economy as a whole would experience less productivity per capita.

- You might expect real estate prices to decline, helping some businesses but hurting others.

Answer 2

If a population declines then it is often due to either increased immigration or a decreased birth rate (when the death rate also exceeds the birth rate). Either way there is a decrease in the number of people in that country and if the birth rate declines there will continue to be a decrease in people of a working age in furture years which makes the affect even worse.

A decline in the number of people of working age (15-64) means that businesses will have fewer people to employ and wil therefore be in danger of having to close down. Larger businesses will be able to offer incentives to working people to work specifically for them e.g. benefits and a higher wage; but smaller businesses won't be able to do this. In summary smaller businesses will end up having to close down as they won't be able to compete and larger businesses will feel a decrease in profits as they must increase wages etc

Answer 3

Because there may be a lack of skilled workers to fill important positions.

Answer 4

Diaper and baby food sales go down. Geriatrics products sales go up. Funeral directors get wealthy.