November 19 2019 / by Baldwin Tong / MarketPro
Silver Economy Spending Power Trends in Europe
The global average life expectancy for a child born today is 77.5 years for a boy and 81 years for a girl. According to the World Health Organization, average life expectancy increased 5.5 years between 2000 and 2016, the fastest increase since the 1960s. Over the coming years, life expectancy is expected to continue to increase. This factor in combination with demographic trends in Europe, the Americas, and Asia, is creating a large Silver Economy (products and services for seniors aged 60 and over) for the baby boomer generation.
The Old World is Rapidly Aging and Female
The population pyramid in Europe is drastically being reshaped. Currently, 19% of the European Union’s population is over the age of 65. By 2100, this is projected to be 31% and the share of people over the age of 80 is expected to more than double. For our latest research on the Silver Economy, we have focused more on the shorter-term, looking at the development of the 60+ cohort’s spending power over the next decade. This cohort currently has more females than males given that women on average live longer. According to our estimates, there are 36% more females aged 60+ than males (around 108 million females to 79 million males). Both groups are expected to increase by roughly 17 million over the next decade.
Europe is a huge Silver Economy market
By 2030, the total annual spending power (in 2011 PPP $) by people aged 60 and over in Europe is expected to increase 39% to over $5 trillion while the number of people in this age bracket is expected to increase 18% to 221 million. Germany currently has the largest share of 60+ European spending power representing 16.5% of the total. This will continue to be the case in 2030 as the spending power of German seniors is expected to grow 41% from $617 billion to $870 billion. Per capita, the seniors of Luxembourg currently have the highest spending power ($38,907) and this is expected to increase 12% to $43,584 over the next decade. Out of the 40 countries in our European analysis, only 3 countries (Finland, Norway, and Italy) are expected to experience a growth of per capita spending power less than 10%.
Highest Silver Economy Growth Expected in Eastern Europe
While Germany is and will continue to be one of the biggest Silver Economy markets in all of Europe along with France, the United Kingdom, Italy, and Russia (these countries combined currently represent 63% of the entire European Silver Economy), the fastest growth over the next decade will come from Eastern Europe. Every Eastern European country with the exception of Kosovo is expected to experience per capita growth in spending power of at least 22%. At the country level, Hungary is expected to experience the smallest growth at 30% (from $35 billion to $46 billion) while Moldova is expected to experience the largest growth at 91% (from $3.2 billion to $6.1 billion). Western European per capita spending power growth in comparison is under 20% with the exception of Ireland (21%) and Malta (41%).
How big is the Silver Economy?
Currently, the 60+ cohort represents 28% of Europe’s $13 trillion total spending power. By 2030, this will increase to a third of Europe’s $16 trillion spending power. While much of this is the result of demographic change, our projections indicate that the growth in spending power is outpacing the headcount growth of this cohort. Companies and organizations with operations in Europe would do well to address the needs of the growing Silver Economy, a group who are expected in both the short and long-term to hold a significant portion of the continent’s consumption power.
October 15 2019 / by Carlos Pavon / Water Scarcity Clock