Migration driver powers on

In the year ending February 2017, 71,300 more migrants arrived in New Zealand, Statistics New Zealand said today.

This is the same annual total as recorded in January, but it is significantly up on December 2016’s figure of 70,588, which was itself a record-breaker.

However, once seasonally adjusted, the monthly net gain of migrants was down to 6,000 in February, as compared to 6,500 in January.

Westpac acting chief economist Michael Gordon said the data showed net migration remained strong in February.

“The February results were down from the record month of 6,410 people in January, largely due to fewer foreign arrivals and returning expats.

But there was also a further uptick in departures of non-New Zealand citizens, which have been trending higher for the last year, he said.

“The latter has been a feature of our forecasts for some time, and is largely an echo of the strong inflows of non-New Zealand citizens over recent years.”

In contrast, there is no sign yet of a pickup in departures of New Zealanders, which probably reflects the continued softness in the Australian jobs market, Gordon said.

“We expect net migration inflows to remain strong for some time, with New Zealand’s positive economic story, including its labour market, making us an attractive destination.”

ASB economists agreed that migration flows don’t look like letting up anytime soon.

They said that while there was a small dip in February’s net gain of migrants, there has now been a net gain of 6,000 of more migrants each month for six months in a row. 

“If that trend continues, it won’t take long for net migration to move past 72,000 in a year.”

They also noted that the importance of students as a driver of net migration continues to decline.

“Taking the first two months of 2017 (when most new students would arrive in New Zealand) and comparing to the same two months in 2016, there is actually a drop of around 9%. 

“This slack is again taken up by work visas, which have increased 21% for the first 2 months of this year vs the same period in 2016.”

The fact that migration flows continue to support the country’s strong population growth means that one of the major demand drivers in the housing market remains firmly in play.