Migration may have peaked

Annual net migration came in at 72,100 in the year to August, which was an increase on the same time last year when annual net migration was 69,100.

But the data also shows that the August figure is down on annual net migration in the months preceding.

Annual net migration was 72,300 in the year to June and it then reached 72,400 in the year to July.

The monthly net gain of migrants is also treading down.

Once seasonally adjusted, the monthly net gain of migrants in August was 5,490.

This was down on the monthly net gain of 5,750 migrants in July and well down from June’s inflow of 6,300.

Population statistics senior manager Peter Dolan said the net migration was mostly driven by non-New Zealand citizens.

“They provided New Zealand with a net gain of 73,500 migrants, compared with 71,700 in the August 2016 year.”

Additionally, fewer New Zealand citizens migrated in the year to August. There was a net loss of 1,500 compared with the net loss of 2,600 in the August 2016 year.

Commentators are now suggesting that New Zealand’s migration boom may have peaked.

ASB senior economist Mark Smith said net migration inflows look to have already peaked, with the weakest monthly reading since early 2016 and with annual inflows easing.

“The trend (three month average) in net arrivals continued to ease and at just under 5,900 persons was well below the 6,200 person peak achieved late last year.

“If sustained, this suggests the net immigration cycle has peaked.”

However, over the near term, ASB expects net migration to remain elevated, he said.

“New Zealand’s apparent economic and political stability remain a magnet for would be immigrants, whilst the fickle global scene from all around the world has kept departure numbers low.”

But Smith added that an improving Australian labour market, if sustained, could potentially slow net immigration via triggering increased departures across the ditch.

Today’s data also bears out the migration suspicions ANZ economists voiced earlier this week.

They said they thought August’s migration figures would show New Zealand is close to a “peak” in net migrant inflows – although they recognised that others have made that type of statement before and been proven wrong.

“But when we eye the recent increase in the departure of non-New Zealand and Australian citizens, and the fact that the net departure of New Zealanders to Australia has started to stabilise there is a case beginning to build.

“We suspect that the lift in departures of ‘non-ANZACs’ could very well reflect the natural cycling effect of those who arrived in New Zealand on say a work or student visa a few years ago and are now leaving as those visas expire. The recent (and proposed) tightening up of residency conditions further reinforces that point.”

But calling a peak in net inflows is very different to saying that they are about to fall sharply and ANZ doesn’t expect that, they said.

The reasons for this are ongoing skill shortages which mean that businesses need migrants and the act the Australian labour market is not yet outperforming New Zealand to the degree that will start to draw larger numbers of New Zealanders across the Tasman again.

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