According to the Stats NZ press release, the nation’s “net migration gain in 2023 is similar to the population of the Taranaki region”.
They mean numerically. Culturally, most 173,000 non-New Zealand citizens who settled here last year are unlikely to be as passionate about rugby, surfing and dairy farming as the population of Taranaki.
The top three countries of origin for Aotearoa’s newest Kiwis were India, the Philippines and China.
As a net figure (minus the record 47,000 net loss of New Zealand citizens) the annual gain was 126,000. Or, as Stats NZ cuts it for illustrative effect, an average gain of 474 non-New Zealand citizens a day.
While that’s shy of the record annual figure of 134,000 to October 2023 it was still the largest net migration gain for a calendar year that the country has ever experienced.
And based on the last year, these provisional results are likely to be revised upwards.
However you cut it, the data confirms the immigration boom isn’t over yet and will continue to disrupt the conventional models that underpin our economic forecasts.
“While there’s a good chance that the last few months will be revised up further, it’s getting more likely that we have passed the peak,” Westpac senior economist Michael Gordon said.
“Monthly net inflows took off strongly in late 2022, following the full reopening of the border. So the ‘hurdle’ for a further rise in the annual rate is now much higher.”
At current levels unprecedented levels, migration continues to be the biggest variable facing local economists and the Reserve Bank as they try to pick the economic path ahead.
“Migration data are tricky for the RBNZ to parse because they have both demand and supply effects on the economy,” ASB economist Nathaniel Keall said.
“A larger population means more spending on the one hand, but also helps reduce capacity constraints in the labour market on the other.”
In its last Monetary Policy Statement, the RBNZ had specifically called out the demand implications, he noted.
It would be keeping a wary eye on the numbers from that perspective.
“We don’t think the threshold has been met for any additional OCR increases. But the risk is distinctly skewed to a later start to cuts than our August forecast.”
Even if the inflationary implications of the current trend start to become clearer there were no guarantees that the trend would hold, Westpac’s Gordon said.
“We continue to keep an eye on two issues. The first is the extent to which migrant inflows recede, or whether they remain historically high,” he said.
“It’s likely that we’re still seeing a catch-up on movements that were delayed during the Covid border closure. But at some point, the state of the economy will come to bear on people’s intentions to move to New Zealand. GDP has flattened off (and has gone backwards in per-capita terms), unemployment is rising, and job vacancies have fallen below pre-pandemic levels.”
The second issue was how the accumulated inflow of migrants to date will affect the economy.
On that, Gordon also noted the ‘mixed” impact.
The high inflows were ”alleviating supply-side constraints in some areas while adding to pressures in other areas such as the pressure on the housing stock”.
“The latter is a particular concern for the RBNZ, which has put itself on high alert about the inflationary impacts of migration.”
Liam Dann is Business Editor-at-Large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
