Hive News Friday: Migration surges again

Lunchtime in Newmarket. Copyright Lynn Grieveson / Hive News

In another reminder that migration is right at the centre of the economic and political debate, Statistics New Zealand reported net migration jumped back up to a record high 6,340 in seasonally adjusted terms in the month of September from 5,660 in August.

Net migration for the year to September hit 69,954, also another record high. Net migration rose in raw unseasonally-adjusted terms to 7,904 in the month of September from 7,069 in the same month a year ago.

Total migrant arrivals rose 6% in the year to a record high 125,600, while departures fell 3% to 55,700, including 60% of those who were New Zealand citizens. Work visa numbers rose 3,900 to 40,200 for the year, while student visas fell 1,400 to 25,600 for the year. Residence visa numbers rose 2,100 to 16,000 for the year.

The result was much stronger than expected and reversed eight months of flat to falling monthly numbers.

The broader story is of a continuation of the turnaround in net emigration by New Zealand citizens as more return home from Britain and Australia, and fewer New Zealanders leave New Zealand. Net migration of New Zealand citizens from Australia rose to 524 in September from 44 in the same month a year ago, while the same category's number for the full year fell to a net exit of 2,108 from 5,333 the previous year and as high as 52,213 in 2013.

Indian students down, but work visas up

Student migration from India has come off the boil, but there's still solid growth from China.

Net immigration from India fell to 9,903 in the year to September from 12,922 the previous year, due in part to tougher English language requirements introduced late last year and a fresh Immigration New Zealand crackdown on fraudulent international education agents inside India. Net migration from China rose to 10,174 for the year to September from 8,502 the previous year.

Auckland took the bulk of the net migration, with 3,941 of the net migrants going to Auckland, up from 3,360 in September a year ago. Net migration to Auckland rose to 32,768 in the year to September from 21,013 two years earlier.

Britain, France, Germany, Australia, the US and the Philippines provided the bulk of the work visas in that order, with those six countries providing 2,764 of the 4,970 work visas issued in the month of September. Most of the top five will have been issued under New Zealand's bilateral agreements for working holiday visas.

Fresh Treasury forecasts?

The three month annualised net inflow now sits at 70,600 and will pose hard questions for Treasury as it re-forecasts its migration numbers, given its May forecast was for a fall to its assumed long-run level of 12,000 by 2019. My understanding is it is likely to significantly increase that long-term baseline in its December Half Year Economic Update.

"This is boosting both demand and supply in the economy, although we are not entirely sure the mix of migrants is quite matched to sectoral skill shortages across the economy," ANZ's Sharon Zollner said.

Westpac was also surprised.

"We have for some time been expecting annual net migration to slow gradually from mid-year as foreigners who arrived on temporary work or student visas over the past three years start to depart," said Anne Boniface.

"And certainly arrivals of those on student visas have slowed noticeably on tighter enforcement of entrance criteria. However, for now, this is being swamped by a lift in arrivals of those on work visas, which were up 14% in September on a year ago," she said.

Winston pounces

Winston Peters leapt on the figures, saying migration continued to "wreak havoc."

"Kiwis can expect longer hospital queues and more competition for jobs and housing," Peters said.

“Thanks to the National government’s open door immigration policy there’s no relief in sight," he said.

"It is destroying the Kiwi way of life. The increased numbers are not matched by increased economic performance as income per person in New Zealand falls."

Have a great weekend and look out below for some Weekend Reads.

cheers

Bernard

21 October 2016