BLOG: Why an Ageing World Doesn’t Automatically Mean Lower Chemicals Demand Growth

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

THE notion of a “replacement society” – where chemicals demand declines due to ageing populations and strained pensions – is a concept that I began to challenge last month.

Today’s post, using recent data and research, adds to last month’s proposition that demographics will reshape demand rather than cause it to collapse –

Spending per person typically peaks in middle age. But it shifts, it doesn’t disappear.

Data from the US and UK show older households spend less on clothing or dining out — but far more on healthcare and home-based services.

OECD, Eurostat and the IMF’s Silver Economy analysis all shows healthcare demand surging with age.

And while pension systems are under fiscal pressure, that doesn’t mean spending collapses.

Goldman Sachs finds life expectancy is up 5% since 2000 — and working lives are 12% longer.

UBS and Cerulli forecast an $80+ trillion wealth transfer from Boomers to Millennials and Gen Z. That’s a powerful source of future consumption.

The claim that we’ve bought most of the things we need underestimates human creativity.

People didn’t “need” EVs, wearables or AI-enhanced homes a decade ago. Now they’re mainstream.

UBS sees “longevity” as a transformational innovation opportunity — spanning healthcare, tech, finance and consumer goods.

Not all the world is ageing. Sub-Saharan Africa and India are driving global population growth.

Their demand for infrastructure, appliances, transport and services could more than offset shrinking demand elsewhere.

But don’t forget China. Its population could shrink to as little as 373m by the end of the century.

Can demand growth in India, Africa etc., where populations are growing, compensate for China’s demographic challenges?

Can China improve healthcare and pension systems to help compensate for the economic drag of a shrinking population?

Here’s my take: We’re not necessarily heading for a demand collapse. We could instead see a world shaped by longer lives, new technologies, government policy and the economic rise of younger regions.

Climate change may be a bigger negative for chemicals consumption than demographics. Adaptation to climate change won’t be fixed by market forces alone. This will be the subject of future posts.

What do you think? Are we overplaying demographic decline? How do we, as a chemicals industry, adapt to the climate change challenge?

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.