Low fertility and aging are transforming a demographic issue into a demand redistribution issue

Overview

This report summarizes Goldman Sachs’ July 21 conference call with economist and demographer Dr. Dean Spears, which focused on the drivers of slowing population growth, aging, and potential population decline, as well as common misconceptions and their economic and corporate-demand implications. The core conclusion is that global births may already have peaked, the persistence of low fertility in many countries may be greater than assumed in traditional forecasts, and demographic changes will begin to have a more material impact on product demand, industry structure, fiscal allocation, and corporate strategy over the next decade.

Core views

The report’s core views include: First, the pace of human population growth has slowed significantly and may have reached “peak births” in 2012. Longer life expectancy is still causing the total population to rise, but fertility rates persistently below replacement levels will eventually lead to population contraction. Second, the global population peak may arrive earlier than the UN baseline forecast because of substantial uncertainty around the assumption that fertility rates will rebound in low-fertility countries. Third, declining fertility is a global, multifactor phenomenon; single explanations such as smartphones, religion, delayed marriage, or female employment are insufficient, while rising opportunity costs may be a broader common thread. Fourth, population decline is not a simple solution to environmental or social problems; decarbonization requires action today, while demographic changes will have a limited impact on emissions before 2050. Fifth, population contraction will weaken economies of scale, raise fixed costs per unit, and reduce the economic foundations for innovation, infrastructure, and product diversity.

Analysis framework

The report uses a conference-summary and thematic-framework approach: it first organizes Dr. Dean Spears’ views on global population history, low-fertility trends, policy dilemmas, and socioeconomic misconceptions, then applies Goldman Sachs SUSTAIN’s Demographic-Driven Demand framework to map changes in age structure to industry and company demand tailwinds and headwinds. The analysis focuses not on earnings forecasts for individual companies, but on identifying how demographic shifts will change the long-term consumption basket, corporate market size, regional expansion needs, and strategic positioning.

Methodology notes

• Demographic Scenario AnalysisTotal Fertility Rate and Population Peak Scenarios

  Uses TFR, replacement levels, peak births, and the population peak to assess long-term population trajectories.

  The report emphasizes that any long-term average fertility rate below approximately 2 will result in long-term depopulation. The UN baseline forecast depends on a rebound assumption in low-fertility countries, while the low-fertility scenario could bring the global population peak forward to the 2050s.

• Thematic Demand FrameworkDemographic-Driven Demand (DDD) Framework

  Measures the impact of demographic changes on industry and company demand.

  Goldman Sachs SUSTAIN states that the DDD framework covers approximately 3,000 companies and compares demographic-driven demand growth from 2030 to 2050 with the 2023 baseline, without yet incorporating product differentiation or corporate strategic adjustments.

• Equity Research Disclosure FrameworkGS Factor Profile

  Compares stocks across four attribute categories: Growth, Financial Returns, Multiple, and Integrated.

  The disclosures explain that GS Factor Profile uses standardized rankings and percentiles to compare the investment attributes of covered stocks with the broader market and industry peers.

• M&A Probability FrameworkM&A Rank

  Uses scores from 1 to 3 to indicate the probability that a company will become an acquisition target.

  The disclosures explain that M&A Rank 1 represents high probability, 2 represents medium probability, and 3 represents low probability. This framework is a general disclosure method in Goldman Sachs’ covered-equity research and is not a central conclusion of this report.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Healthcare / MedTech / Pharmaceuticals

  Beneficiary of population aging

  Strengths

  Growth in the elderly population supports higher demand for age-related treatments, healthcare services, medical technology, and pharmaceuticals.

  Weaknesses

  The report also notes that healthcare and MedTech are not completely immune, as the growth rate of the elderly population may slow relative to the past several decades.

  Comparison

  Compared with industries driven by younger or prime consumer-age populations, such as apparel, education, and automobiles, healthcare has more direct demand support from population aging.

  Risks

  Fiscal pressure, constraints on healthcare reimbursement, slower growth in the elderly population, and regulatory changes could weaken demand realization.

• Senior Living & Aging at Home

  Direct beneficiary of aging

  Strengths

  Growth in the population aged over 65 and preferences for aging at home support demand for long-term care, assisted living, rehabilitation services, home healthcare, telemedicine, and digital devices.

  Weaknesses

  Supply availability, labor costs, and care quality constraints may limit industry expansion.

  Comparison

  Compared with traditional institutional senior care, technologies and services related to aging at home may better align with the report’s observation that 70% of people aged over 65 prefer to remain at home.

  Risks

  Labor shortages, insurance reimbursement, occupancy fluctuations, and the real estate cycle may affect profitability.

• Home Improvement & Furnishings

  Beneficiary with a high elderly-consumer multiplier

  Strengths

  People aged over 65 spend more on home improvement, furniture, décor, and consumption related to time spent at home.

  Weaknesses

  Interest rates, housing transaction volumes, and disposable income affect home-improvement demand.

  Comparison

  Compared with categories such as automobiles and apparel that are more sensitive to younger consumers, home improvement benefits from increased time spent at home and aging-related adaptation needs.

  Risks

  A downturn in real estate, longer repair and upgrade cycles, and shrinking consumer budgets.

• Leisure & Entertainment

  Partial beneficiary of aging

  Strengths

  Categories such as cruises, television viewing, pets, reading, and leisure experiences may benefit from increased free time among retirees.

  Weaknesses

  Different leisure subsegments are sensitive to income, health status, and mobility.

  Comparison

  Compared with airports and public transportation, which are linked to commuting or business traffic, cruises and online entertainment are more likely to benefit from changes in retirees’ consumption patterns.

  Risks

  A slowdown in discretionary consumption, fuel costs, health events, and the discretionary-spending cycle.

• Discount & Multiline Retail

  Beneficiary of aging and value-oriented consumption

  Strengths

  Discount and multiline retail may benefit from elderly consumers’ baskets, value-oriented consumption, and demand for necessities.

  Weaknesses

  Low-price competition is intense, and margins may be affected by supply-chain and wage costs.

  Comparison

  Compared with high-priced discretionary consumption, value-oriented retail is more defensive in an environment of fiscal and pension pressure.

  Risks

  A marginal slowdown in trading down, inventory-management errors, and price competition.

• Apparel & Footwear

  Demographic headwind

  Strengths

  Brands, channels, and product innovation can still offset part of the demographic headwind.

  Weaknesses

  A declining younger population reduces the primary historical consumer base for new apparel and footwear.

  Comparison

  Compared with healthcare and home improvement, this category relies more heavily on spending by younger and prime consumer-age cohorts.

  Risks

  Demand contraction, inventory markdowns, brand aging, and insufficient regional growth.

• Autos

  Demographic headwind

  Strengths

  International expansion, electrification, intelligent vehicles, and service revenue may provide offsets.

  Weaknesses

  A decline in the population of new driving-age consumers and lower vehicle spending among older groups leave the industry at a strategic crossroads.

  Comparison

  Compared with home- and healthcare-related industries, autos are more affected by the size of younger and middle-aged core consumer cohorts.

  Risks

  Demographic headwinds compounded by interest rates, regulation, price competition, and capacity-utilization pressure.

Key data

• Conference call date2026-07-21Goldman Sachs-hosted webcast on demographics with Dr. Dean Spears.
• Report date2026-07-29Date corresponding to the file name and report metadata.
• Global peak births2012The speaker’s view is that humanity has already passed “peak births,” but has not yet reached the total population peak.
• Replacement fertility thresholdApproximately 2 children per 2 adultsA long-term level below this threshold will lead to long-term depopulation.
• TFR scenario example1.5The report states that at a TFR close to the level between Europe and the United States, the population could nearly halve by the third generation.
• UN baseline global population peak2084The report notes that this forecast depends on the assumption that fertility rates in low-fertility countries rebound to approximately 1.6.
• Global population peak under the low-fertility scenario2050sThis is closer to the earlier population-peak view held by some demographers cited in the report.
• Population covered by fertility rates below 2Approximately two-thirds of the global populationThe report states that low fertility is no longer limited to wealthy countries.
• Sub-Saharan Africa TFR4.3The region remains a key source of uncertainty for the global population trajectory, although its fertility rate is also declining.
• Annual change in the population aged over 65 in developed economiesApproximately 4 million increase per yearThe report cites UN data showing that the retirement-age population continues to grow.
• Annual change in core consumers aged 35 to 55 in developed economiesApproximately 3 million decrease per year from 2030The report believes that the decline in the core consumer-age cohort will increasingly affect demand.
• Number of companies covered by the DDD frameworkApproximately 3,000 companiesUsed to identify the impact of demographic changes on company and industry demand.
• Number of global equities covered by Goldman Sachs3,104 stocksAs of 2026-07-01, the number of globally covered stocks with investment ratings from Goldman Sachs Global Investment Research.

Impact & implications

The investment implication is that demographic change is not merely a long-term macro backdrop; it will affect industry demand through age-based consumption preferences, fixed-cost absorption, market size, fiscal-spending priorities, and corporate geographic positioning. At the corporate level, companies in demographically challenged markets may need to maintain customer value through product redesign, international expansion, servitization, and consolidation. At the investment level, investors should distinguish between demographic-tailwind and demographic-headwind sectors and focus on the revenue resilience of companies with more favorable demographic profiles.

Risks

• If fertility rates rebound relative to the assumptions of the UN or other demographic forecasts, the timing of the population peak and industry impacts may be pushed back.
• Immigration policy, labor-force participation, changes in retirement ages, and productivity gains from AI may alter the strength of population contraction’s economic transmission.
• Demographic tailwinds do not guarantee earnings realization; product differentiation, pricing power, execution, and geographic positioning remain critical.
• Fiscal pressure may increase constraints from pensions, healthcare, and taxation, thereby crowding out environmental investment or discretionary consumption.
• This report is a conference summary and thematic research report. Some views are from an external speaker and do not necessarily represent Goldman Sachs’ official views.

What to watch

• Whether TFR remains below replacement levels globally and in major economies, particularly the United States, Japan, China, India, Latin America, and Sub-Saharan Africa.
• Whether the UN revises down the timing of the global population peak and whether the low-fertility scenario becomes the market baseline.
• The pace of growth in the population aged over 65 and decline in core consumers aged 35 to 55 in developed economies.
• Whether the differences in revenue surprises between high- and low-scoring companies under the DDD framework persist.
• Whether companies respond to demographic changes through product redesign, international expansion, servitization, and M&A consolidation.
• Whether demand and valuations in tailwind industries such as senior care, healthcare, home improvement, discount retail, cruises, and online entertainment have fully reflected these trends.