Statistics New Zealand has released its permanent & long-term migration figures for December 2015, which revealed that net permanent and long-term migration into New Zealand continues to boom, smashing records in the 2015 calendar year:
Seasonally adjusted permanent and long-term (PLT) migration figures showed a net gain (more arrivals than departures) of 5,500 migrants in December 2015, slightly lower than the all-time high of 6,200 in November 2015.
December 2015 had a seasonally adjusted net gain of 200 migrants from Australia, the ninth month in a row to show a net gain. Before April 2015, the last net gain in migrants from Australia had been over 20 years ago (in June 1991)…
Unadjusted figures showed a record net gain of 64,900 migrants in the December 2015 year. The annual gain in migrants has set new records for the last 17 months. Before the August 2014 year (43,500), the highest annual net gain in migrants was 42,500 in the May 2003 year.
Both more arrivals and fewer departures drove the increased net gain of migrants in the December 2015 year. Migrant arrivals (121,900) continued to reach a new high, up 12 percent from the December 2014 year. Migrant departures (57,000) were down 2 percent.
In the month of December, there was a net inward migration of people from Australia of 568 people. There was also a net inflow of 769 migrants to New Zealand from Australia in the 2015 calendar year – the highest annual inflow since October 1991:
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As noted each month, New Zealanders should be particularly sensitive to employment prospects in Australia, and swings in migration levels between the two nations should be indicative of the underlying strength of the Australian labour market compared with the New Zealand market.
That is, when job prospects are relatively strong in Australia, we should logically expect migration into Australia from New Zealand to increase substantially. By contrast, when Australian employment conditions weaken, we should logically expect New Zealand migration to slow.
The below chart plots annual Kiwi net migration against the trend Australian unemployment rate:
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As you can see, the correlation has been fairly strong historically. However, we currently have a situation whereby Australian unemployment is improving whilst net migration to New Zealand continues to rise. Indeed, Australia’s unemployment rate (5.8% seasonally adjusted) is now below New Zealand’s (6.0% seasonally adjusted).
This could mean that migration flows will soon reverse, or that New Zealanders and Aussies don’t believe the ABS numberwang, and that the economic situation on the ground in Australia is worse than suggested by the macro indicators.
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Regardless, the last two times net migration between Australia and New Zealand has been at similar levels were during the early-1980s and early-1990s recessions, thus presenting a bad omen for the Australian economy.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
