The report from the South Australian Centre for Economics Studies (SACES) warns that demography, not government policy, could be the biggest influence on which employment sectors grow in South Australia.

It projects that employment in the state’s “healthcare and social assistance” and “personal and other services” sectors could grow from more than 181,300 in 2022/23 to 224,800 by 2032/33.

That’s up from 148,700 employed in those sectors in 2019/20.

The two sectors’ collective share of the state’s employment also grew from 15 per cent in 2010 to 17.4 per cent in 2020, the report highlights.

This share increased even further last financial year to 19.4 per cent, which is roughly double the next highest employing sectors: retail trade (9.7 per cent), construction (8.7 per cent) and education and training (8.2 per cent).

The report, titled Demography: Driving Employment in South Australia. Are we prepared?, points to South Australia’s ageing population as one of the drivers behind the projected growth in the healthcare workforce.

It states that despite international immigration to South Australia being stronger than expected during the pandemic, it has been “more than outweighed by much faster than forecast growth in employment demand and actual jobs in Health Care and Social Assistance and Personal and Other Services”.

“South Australia’s future labour force and economy will be significantly influenced by demographic trends, principally growth in the size of the older adult population in parallel and association with higher rates of chronic disease and growth in the disability industry,” the report states.

“This reality contains implications, inter alia, for public policy, for public and private spending, for the demand for housing (and new styles of accommodation), overseas migration and workforce productivity.”

The report predicts that shifting consumer preferences of the older adult population – namely a desire for in-home services and greater independent living, rather than traditional aged care settings – will “cause shifts in labour demand”.

“The aging of the population also suggests, without a boost to international or interstate migration and higher retention rates of younger (and qualified) entrants to the labour force, that South Australia in sync with other States, will experience slower labour force growth and a decline in the labour force participation rate,” the report states.

It comes after the Australian Bureau of Statistics (ABS) released population forecasts last week projecting that the median age of South Australia’s population will rise from 40.7 years in 2022 to between 45.6 and 50.0 years by 2071.

The projections would give South Australia the second-highest median age behind Tasmania.

The SACES report asks whether the projected growth in healthcare and personal services employment will be “sufficient to meet the needs of an aging population”.

SACES executive director and University of Adelaide associate professor Michael O’Neil, said it would be “a real challenge”.

O’Neil, who co-authored the report with visiting research fellow Darryl Gobbett, said there would also be implications for the local defence sector, which will have to compete for labour and university graduates amid these demographic trends.

“Obviously in South Australia we’re thinking about the frigates and the submarine contract – we need to build up the skills and the labour force for that, there’s no doubt,” he said.

“I guess what we’re pointing to is… don’t forget the demands that will be on the labour force – different types of skills, different types of training – as a result of the demographics of South Australia.”

O’Neil said there were also a lot of highly-skilled, well-paid jobs in the healthcare and social services sectors to compete with defence.

“Obviously the defence sector is very different types of skills, but it does actually involve both males and females in the labour force,” he said.

“If we look at the skills, though, in the aged care sector, we’re talking about very highly skilled doctors, surgeons, very highly skilled nurses.

“By and large a lot of them are well paid as well, not so much in the aged care sector.

“But if you’re a younger person thinking about where a career is at the moment, if you want to work with people rather than mechanics… there’s still going to be a very strong demand in that health aged care sector.

“So what we’re just saying is: don’t forget this sector. In South Australia, it will be a real challenge.”

The report recommends greater allowances for over-65s to remain in the workforce as one part of the solution, along with finding measures to increase labour force productivity.

“Within what is expected to be in coming years overall private and public sector funding constraints, higher productivity as at least a part substitute for forecast workforce increases could help to sustainably raise wages and service standards,” the report states.