Baby Births Are Down; how bad is it?

“In 2020, 25 states had more deaths than births. The decline has continued in early 2021.“– Bloomberg News

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One of the concerns for the toy industry has been an impending decline in births due to the coronavirus pandemic. Almost exactly one year ago, in my article, “One Half Million Fewer Births Due to Coronavirus; The Coming Impact on the Toy Industry,” I quoted the Washington Post as follows:

“In a new report, economists writing for the Brookings Institution estimate that the United States could see “on the order of 300,000 to 500,000 fewer births next year” as a result of the economic recession triggered by the novel coronavirus.” – Washington Post

But how accurate is that prediction turning out to be? We have our first indicators in a June 23, 2021 Bloomberg New article, “Nine Months After Lockdowns, U.S. Births Plummeted by 8%.” The article states:

Nine months after the declaration of a national emergency due to the emergence of the Covid-19 pandemic, U.S. births fell by 8% in a month.

… the largest decline since 1973, according to a Wednesday report from the Centers for Disease Control and Prevention.

What can we make of these numbers? I wrote an article, “One Half Million Fewer Births Due to Coronavirus; The Coming Impact on the Toy Industry,” one year ago in which I wrote as follows: “I checked and according to Statista, there were 3.79 million babies born in 2018. 500,000 births represent roughly 13% of that figure.”

According to the Bloomberg article, the declines cited are well short of the 13% . However, it is still an alarming number for the toy industry. Our supply of end-users will start to shrink in about a year. The impact will first be felt by baby supply companies and then by those who specialize in preschool toys. After that, year by year, different product segments will feel the impact as the children continue to age.

The decreases vary by state. California had the biggest drop in births, a whopping 19%. It is also a concern that the drop is so large in California, our largest state. California is home to large metropolitan areas in southern and northern California. These cities have an outsized number of first-time parents in their 30s who typically have two jobs and money to spend on their children. The loss of these shoppers could make an outsized difference in total dollars spent.

Smart toy companies will keep their eye on these birth declines when making their plans.