NZ: Migrant inflows continues to slow – ANZ

Despite bouncing a little in October, the pace of monthly net migrant inflows continues to slow in New Zealand, led, in part, by a higher numbers of departures, points out Phil Borkin, Senior Economist at ANZ.

Key Quotes

“Increased departures are being driven by non-New Zealand and Australian citizens. We think this reflects a natural cycling effect, and points to an ongoing rolling over in net inflows – even ahead of possible further policy restrictions.”

“Seasonally adjusted visitor arrivals rose in the month, but the pace of underlying growth is far more modest than we’ve seen over recent years.” 

“Key Points

• In seasonally adjusted terms, a net inflow of 5,580 migrants was recorded in October. This is up from September’s 2-year low of 5,220. The 12-month running total remains strong at just under 71,000, but in 3-month annualised terms, the net inflow has fallen to below 65k for the first time since mid-2015. This cooling is reinforced by the Statistics NZ trend measure, which shows a monthly net inflow of 5,400, also the lowest since mid-2015. 
• The recent easing in net inflows has been driven by a combination of rising departures and fewer arrivals. Long-term arrivals did bounce a little in October (+3.7% m/m sa), but they are still down from recent highs. Long-term departures also rose, and in trend terms are at the highest level since late 2013.
• Interestingly, the lift in departures has been led by departures of non-New Zealand and Australian citizens. We believe this reflects the natural cycling effect of the large numbers of immigrants who perhaps arrived a few years ago on work or student visas now choosing or having to leave.
• Visitor arrivals rose 1.9% m/m sa (+3.9% y/y). One-off events have clouded the picture of late, but even with the bounce in October, the rate of growth in tourist arrivals is slowing from the double-digit annual pace seen over much of 2016. We suspect this largely reflects capacity issues, and we are not necessarily negative on the sector, especially with the recently lower NZD likely to boost overall spending.”