Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 27 June 2016

Kiwi migration fizzles out

NZ migration from Oz pulls up

It's been suggested that trends in migration from Australia towards Australia might bode ill for our economy, a kind of pseudo-recession indicator if you will.

Certainly, there had been a significant increase in those migrating permanently of for the long term across the Tasman - many of whom were originally Kiwis returning home.

It's not too hard to see why these trends developed.

New Zealand had been running a much higher unemployment rate than Australia while we were still enjoying the spoils of a heady resources construction boom.

But then as the mining construction boom passed its peak in Australia, opportunities for employment here declined, and the unemployment rate ticked higher - just as NZ was being anointed with its "rock star economy" status.

Unfortunately New Zealand's one-time rock star economy rather seems to have rocked itself out.

In fact, NZ now has a higher unemployment rate than Australia, after an odd-looking blip last in the quarter before last.

Now there isn't all that much to pick between either economy.

Both have indicators of under-employment, under-utilisation and weakened commodity prices (here it's mainly bulk commodities, over there, dairy).

And both countries are looking to tourism and international student migration to paper over the cracks.

It looks as though the trend in net migration having tilted sharply in favour of New Zealand has now reached something approaching equilibrium. 

In fact in April there was a small seasonally adjusted net flow back in favour Australia. 

In truth, whether 100 or so people decide to head this way or that will have little bearing on the health or otherwise of Australia's economy going forward.

About 60 per cent of permanent migrants to Australia now hail from Asia.

And with our international student visa rules to be relaxed significantly from 1 July this trend will be reinforced, with a high share of the new applicants expected to be from China and India.