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Deborah Lambie: Milford Asset Management analyst on how investors plan to respond to demographic shift · Best of Business

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  Speaker 2: Deborah Lambias of Milford Asset Management, Hey, Deborah.
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  Speaker 3: Hi, how are you very well?
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  Speaker 2: Thank you listen.
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  Speaker 4: One thing that we're talking a lot about in the
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  Speaker 4: community at the moment is aging populations. Do you get
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  Speaker 4: the impression investors of thinking about this as well?
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  Speaker 3: Yeah? So, the rise of asing populations around the world
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  Speaker 3: is one of the most significant demographic shifts in modern history.
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  Speaker 3: So here in New Zealand, the proportion of people aged
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  Speaker 3: over sixty five is expected to almost double by twenty fifty,
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  Speaker 3: and globally we see similar trends. So the number of
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  Speaker 3: people aged over sixty is expeded to double and the
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  Speaker 3: number of people aged over eighty is expeded to triple
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  Speaker 3: by twenty fifty. And investors are increasingly focused on the
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  Speaker 3: implications of this, given that on average, twenty five percent
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  Speaker 3: of total health care spend occurred in the last ten
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  Speaker 3: years of life of an individual and around ten percent
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  Speaker 3: in the final year of life. So aging populations simultaneously
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  Speaker 3: played immense pressure on healthcare systems and create substantial opportunities
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  Speaker 3: for companies that provide critical services due to increasing demands
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  Speaker 3: for medicines, hospital care, and death care services.
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  Speaker 2: Are there many businesses, many companies who are actually talking
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  Speaker 2: about how this agent population trend will impact them.
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  Speaker 3: Yeah, and I'll maybe give you three three examples. So
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  Speaker 3: HCA operates over one hundred and eighty hospitals in the
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  Speaker 3: US and it's expecting total spending hospitals to accelerate to
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  Speaker 3: around six percent per year over the next decade. So
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  Speaker 3: in other words, that means that it will have almost
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  Speaker 3: doubled its revenue in ten years time. Another example is AstraZeneca,
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  Speaker 3: which is a global pharmaceutical company, and it expects global
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  Speaker 3: demands for pharmaceuticals to accelerate from around four percent growth
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  Speaker 3: per year to around six percent. And a final interesting
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  Speaker 3: example is Service Court, which is a death care provider
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  Speaker 3: in the US and they operate in the funeral, cremation
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  Speaker 3: and cemetery space. And so when I met with the
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  Speaker 3: company earlier in the year in the US, they were
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  Speaker 3: talking about expecting an increase in volumes for a decade
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  Speaker 3: and a half and that's driven by the first av
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  Speaker 3: boomers reaching eighty years old starting from twenty twenty six.
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  Speaker 3: So this is a bit of a morbid topic. But
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  Speaker 3: as they say, nothing is certain in this life apart
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  Speaker 3: from death and taxes.
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  Speaker 4: That's true, I suppose when it comes to how they're
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  Speaker 4: performing on the market. How are these companies who are
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  Speaker 4: in healthcare and death care fearing when you compare them
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  Speaker 4: to let's say, the high growth sectors like AI.
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  Speaker 3: Yeah, so when companies like Nvidia they have absolutely soar
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  Speaker 3: due to the AI boom, the more steady returns from
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  Speaker 3: healthcare and death care sectors are still actually highly respectable,
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  Speaker 3: especially in this more defensive part of the market. So
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  Speaker 3: Astrosenic and Service Corps shares have delivered a respectable low
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  Speaker 3: double digit percentage return on average over the past five years,
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  Speaker 3: and HbA has been even more impressive, delivering an average
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  Speaker 3: twenty five percent return per year over the past five years.
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  Speaker 2: And then what about the workers in healthcare? How are
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  Speaker 2: the how's the agent population going to affect them?
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  Speaker 3: Yeah, So, in addition to increasing demand for healthcare, aging
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  Speaker 3: populations of course reduce the pool of working age people.
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  Speaker 3: So this means we have less work to do the
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  Speaker 3: work that we're currently doing, and we're going to have
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  Speaker 3: more of that work. So companies are looking for solutions
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  Speaker 3: and things like automation and robotics, and this is leading
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  Speaker 3: to advances and things like automated pharmacies and these work
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  Speaker 3: via robots that can scan a QR code for a prescription,
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  Speaker 3: get the medicines that have been prescribed, to spense them,
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  Speaker 3: and then whila, you can pick up your prescription, no
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  Speaker 3: humans required. And a company called Becton Dickinson is the
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  Speaker 3: global leader here. And then we're also seeing very rapid
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  Speaker 3: advancers and things like laboratory automation which are greatly increasing
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  Speaker 3: the efficiency of the way that lads run.
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  Speaker 2: Yeah, is this happening in other sectors as well.
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  Speaker 3: Yes, So as the pool of working age people shrinks,
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  Speaker 3: sectors ranging all the way from manufacturing through to logistics
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  Speaker 3: are increasingly turning to automation to fill the gap and
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  Speaker 3: maintain productivity. So, for example, robotic density and manufacturing has
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  Speaker 3: doubled over the past six years and has increased set
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  Speaker 3: to increase further. And so robots greatly increase the productivity
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  Speaker 3: of factories. They keep workers and safer by literally taking
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  Speaker 3: the load of heavy lifting, and they also reduce the
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  Speaker 3: number of people or acquired in the factory. So these
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  Speaker 3: are just a few examples of ways that companies are
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  Speaker 3: innovating to helpless solutions that develop nations require as they
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  Speaker 3: face shrinking workforces and aging populations.
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  Speaker 2: Debra, listen, that's fascinating. Thank you so much. I really
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  Speaker 2: appreciated the Zebra Lambie Milford Asset Management.
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