Net migration will rise with jobs: ASB

Rugby World Cup visitors reached 74,000 last month. Photo by Stephen Jaquiery.
Rugby World Cup visitors reached 74,000 last month. Photo by Stephen Jaquiery.
Steady job growth in New Zealand will see skill shortages emerge, which will then encourage an increase in inward migration, ASB economist Jane Turner says.

Commenting on the Statistics New Zealand international travel and migration figures, Ms Turner said net migration plunged through September, reverting to the steady outflow of people seen since March.

Permanent departures increased in September and arrivals fell, she said.

"Departures to Australia remained elevated, despite anecdotes of weakening in the Australian labour market over recent months. We expect permanent departures to Australia to ease in coming months as Australia's job growth slows and the labour market in New Zealand continues to gradually recover."

Permanent arrivals remained subdued, reflecting the weak stage of the New Zealand labour market, Ms Turner said.

Statistics NZ figures showed short-term visitor arrivals spiked 18% in September as Rugby World Cup fans started to arrive.

There were 74,000 RWC-related arrivals in September and a total of 80,000 since July.

Ms Turner noted visitor arrivals were up only 45,800 from year-ago levels. The weakness was probably related to the fall in visitor arrivals observed since the February earthquakes, as well as some visitor displacement; RWC visitors replacing regular tourists in the tournament period.

The visitor numbers stacked up well compared with forecasts for total visitors of 85,000 to 100,000, she said.

The tournament had encouraged New Zealanders to put off holidays abroad, with a 17% drop in New Zealand resident short-term departures.

However, New Zealand resident departure numbers had been strong in the past year.

"This suggests New Zealanders may have timed holidays abroad before the RWC tournament dates."

There were no fresh implications for the Reserve Bank from the new data, Ms Turner said.

"The Reserve Bank will look through the RWC activity, given its temporary nature. The bank will be more concerned about the underlying trend and the ongoing challenges the tourism industry faces."

The weakness in net migration highlighted ongoing weakness in domestic consumer demand and the lack of urgency to increase the official cash rate, she said.

 

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