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5 companies set to win from Australia’s population explosion

The Australian Bureau of Statistics (ABS) has released its latest projections on Australia’s population growth rates and the results make for interesting reading by investors.

Under the ‘medium’ scenario, Australia’s population is forecast to almost double from 22.7 million people in 2012 to 41.5 million in 2061. The near doubling of the population in approximately 50 years is fast when one considers it took about 225 years for the population to get to 22.7 million.

Interestingly the long-term projections which extend out to 2101 provide a very wide range for Australia’s population (between 42.4 million people and 70.1 million people). Under the ‘medium’ scenario, however, the population will grow by just a further 12 million to 53.6 million in 2101.

The projected population growth within the next 50 years will require a significant increase in infrastructure and create opportunities for many companies to benefit and grow.

5 companies that should do particularly well out of Australia’s population explosion are:

  • Lend Lease (ASX: LLC): As one of Australia’s major property and infrastructure companies Lend Lease is well positioned to win contracts to build critical assets and housing to accommodate a burgeoning population.
  • Transurban (ASX: TCL): The major cities of Sydney and Melbourne are already experiencing serious bottlenecks and traffic congestion. Toll roads will become increasingly used and more will be required.
  • Woolworths (ASX: WOW) and Wesfarmers (ASX: WES): As two of Australia’s major retailers they stand to benefit from feeding and clothing a population twice the current size.
  • Origin Energy (ASX: ORG): The 41.5 million people will all require essential services such as water, electricity and gas. Origin’s vertically integrated business has it well placed to benefit from Australia’s population growth.

Foolish takeaway

Identifying investment themes that provide a tailwind is an important trait for investors to develop. The tailwind from population growth will help some firms more than others making the selection of the right stocks critical.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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