According to the 2020 Census, thirteen states and Washington, D.C. all saw significant population growth over the past 10 years. Texas alone saw its population grow by nearly four million people, a 15.9% increase. While Utah added 500,000 (18.4%) and Nevada gained 400,000 (15%) residents.
This is significant because consumer spending accounts for 70% of economic activity in the U.S. Therefore, more population in a state leads to greater economic growth.
Take Utah, for example. It had the greatest percentage increase in population at 18.4%. This, in turn, resulted in a five-year annualized GDP growth rate of +3.4%, the second-highest in the nation, according to an analysis by usatoday.com. The five-year annualized employment growth rate was +2.4%, the highest in the nation.
In addition to direct consumer spending, more people translates into greater demand in other key business sectors. According to Deloitte, natural gas consumption depends on growth in three critical sectors: power generation, industrial use and transport. All of these sectors are likely to see growth to meet the needs of an increasing population.
Another sector that affects the demand for natural gas is the construction industry, where natural gas is used in both commercial and residential applications. And, according to an analysis published recently by Rock Products, the aggregates industry’s leading source for market analysis, population growth also is a significant driver for the construction industry.
The report states, “Headcounts increase demand for housing, retail, services and infrastructure.” And concluded, “Keep your eye on population growth as you plan for your business, as like sentiment, it is a key factor in the health of our construction economy.”
The natural gas industry has seen dramatic growth over the past 20 years, and while the growing demand for natural gas might not be consistent across the country, the states experiencing an increase in population present a significant opportunity for the natural gas industry.
Figure 1. Population Growth by State 2020. Adapted from “Cubit’s Blog – Data Tips + Occasional Cubit Stuff,” by K. Carney, April 27, 2021, Cubit’s Blog – Data Tips + Occasional Cubit Stuff. Retrieved May, 19, 2021, from https://blog.cubitplanning.com/2021/04/population-growth-by-state-2020/.