Migration gains surge to a monthly record in February

Migration continues to recover on an annual basis. Photo / NZME

Government efforts to open the borders to migrant workers appear to be working with a new record being set for arrivals of migrants on work visas.

Migration continues to recover on an annual basis with a net gain of 52,000 for the year to the end of February - a rise of 2000 from a month earlier.

But there was a big surge in non-New Zealand migrant arrivals in February with 21,400 migrant arrivals the highest migrant arrivals estimate for any month - exceeding the previous high of 21,100 in February 2020, StatsNZ said today.

The net migration gain of 11,700 in February 2023 was the second highest for any month, behind February 2020, which had a net migration gain of 14,600.

This was driven by a record number of arrivals on work visas. February also saw an increase in student visa arrivals, coinciding with the start of the academic year, StatsNZ said.

The net migration gain of 11,700 in February 2023 is provisionally the second highest for any month, behind February 2020, which had a net migration gain of 14,600.

The provisional net migration gain of 52,000 was made up of a net loss of 17,300 New Zealand citizens, which was more than offset by a net gain of 69,300 non-New Zealand citizens, StatsNZ said today.

“This surge most likely reflects the demand to live and work in New Zealand that accumulated over the lockdown period, and is now being unleashed, said Westpac senior economist Michael Gordon.

The annual gain of 52,000 actually understated recent strength, he said.

“Taking the last four months, we’re running at an annual-equivalent pace of around 100,000 people.”

The combined total of 152,900 migrant arrivals for the February 2023 year was above the long-term average of 118,800 for February years (pre-Covid 2002–2019), StatsNZ said.

The 100,900 migrant departures for the February 2023 year are above the long-term average of 91,600 for February years (pre-Covid 2002–2019).

Meanwhile, there was a provisional net migration loss of 10,200 people to Australia in the year ended September 2022.

This was made up of 17,900 migrant arrivals from Australia to New Zealand, and 28,100 migrant departures from New Zealand to Australia.

Traditionally, there has been a net migration loss from New Zealand to Australia. This averaged nearly 30,000 a year during 2004–2013, and about 3000 a year during 2014–2019.

Migration data did need to be taken with a grain of salt as it was provisional and subject to large revisions, Gordon noted.

“That said, the direction of recent revisions has been upward, not down. And we can cross-check them to some degree by looking at people’s stated intentions on their arrival cards,” he said.

“The number of people saying that they intend to stay here for more than a year has indeed surged to new highs in recent months.”

Gordon said he expected that pent-up demand would keep net migration elevated in the coming months, before settling down to more modest net inflows in the following years.

“Since migration is largely driven by people moving to opportunity, the expected cooling in the New Zealand economy in the year ahead will also play a role in moderating those inflows,” he said.

In terms of New Zealand’s battle with inflation migration is a double-edged sword, both adding to demand in the economy and helping to ease labour force pressure.

“In last week’s OCR review, the Reserve Bank cited migration as a source of net demand and hence of inflation pressures, potentially requiring higher interest rates,” Gordon said.

This was how the RBNZ had traditionally viewed migration.

“But it’s worth highlighting because the business community seems to be taking the opposite view at the moment – hoping that the return of migrant workers will ease labour shortages and bring wage inflation down.”

On balance the net effect was likely to be broadly neutral for the economy as a whole, he said, though the effects might differ across sectors, he said.