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Understanding how changes in the United States’ demographic profile will impact the long-term credit outlook for specific municipal borrowers requires a granular analysis of the individual drivers of those shifts. Examining how each borrower’s population is impacted by shifts in population by age group, national and international migration trends, fertility rates, and labor force participation can provide municipal analysts with a deeper understanding of future revenue trends, expenses, and capital needs. The U.S. population is aging, but evidence suggests that the economic and fiscal pressures associated with that shift will not be evenly distributed across regions.

To understand how demographics drive economies, BAM analysts consider trends in population, employment, personal income, retail sales, and real estate values in their analysis. The proximity to transportation networks, the development of infrastructure following a sustainable and affordable capital plan, and the track record of growth in local industry are also important factors as part of BAM’s credit review process.

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