Recently released migration data from Statistics New Zealand for April 2023 depict a clear return to pre-COVID-19 levels.
Net migration for the year ended April 2023 was a whopping 72,330 with a rapid increase in the number of arrivals and departures, both short and long-term. This latest net migration statistic nearly rivals that for 2020 (net migration of 89,927), and far exceeds that of the five years prior to 2020 (net migration average of 55,238).
In this article we explore the dynamics of migration and international travel. We also take a look at the two components of our current net migration, departures and arrivals for the year ended April 2023.
COVID-19 shifted the dynamics of departures from New Zealand.
Prior to COVID-19, the ratio of overseas visitors (overseas residents departing New Zealand after a stay of less than 12 months) to New Zealand residents departing New Zealand each year, tended to be weighted more towards overseas visitors. But since 2020 this trend has changed, with New Zealanders now representing a larger proportion of departures. For the year ended April 2023 there were close to 4.4 million overseas visitors and New Zealand residents departing New Zealand, and these departees were split evenly between the two groups as displayed in the figure below.
The rapid pace of departures is heading towards pre-COVID-19 levels. It will be interesting to see if these shifted dynamics will hold in the long-term or whether demand for travel will flatten off, and if it does to what degree.
The number of New Zealand residents heading abroad long-term was the highest it has been since 2013.
Long-term migrant departures, that is the number of New Zealand residents who depart New Zealand and cumulatively spend 12 of the next 16 months out of New Zealand, were just above 99,000 for the year ended April 2023, the highest since 2013. These long-term migrants typically comprise largely 20 to 30-year-olds, who are now not part of our workforce.
It is hard to gauge, at this point, whether this is a short-term spike as a response to the reopening of borders after a long closure, or if the dial has completely shifted. The Australian Government’s announcement for easier and quicker citizenship for New Zealanders from July 2023 will only further fuel this trend.
Long-term migrant arrivals were at a near 10-year peak.
Falling just shy of the 2020 peak in long-term migrant arrivals (just over 177,000), in the year ended April 2023 there were nearly 172,000 long-term migrant arrivals in New Zealand. This comprises overseas residents who arrive here and cumulatively spend 12 of the next 16 months in New Zealand, forming a growing and key part of our workforce. In a recent report from the Organisation for Economic Co-operation and Development (OECD), New Zealand was ranked as the number one destination for high-skilled workers in March 2023. This influx of new migrants will relieve some of our workforce pressures.
The number of overseas visitors is returning to pre-COVID-19 levels.
Although the number of overseas visitors for the year ended April 2023 only represented 71 percent of the total recorded in 2020, at 2.4 million there is a clear trend towards returning to pre-COVID-19 levels. Of note, the number of overseas visitors in the year ended April 2022 was just below 252,000.
Importantly, this rapid upturn in overseas visitor arrivals is a welcome boost to overall economic activity in New Zealand in light of the slowdown in our economy. It could be argued, however, that this upturn also contributed to short-term inflation, although to what extent is unknown.
Navigating migration dynamics.
New Zealanders are heading abroad at near record levels. Whether this trend is simply a short-term reaction to the end of the COVID-19 era, or is the start of a more long-term shift, retention of New Zealanders is a growing challenge. And Australia has certainly added to this. Industry prayers for workers have been answered though. Long-term migrant arrivals have been a vital source of labour, plugging deep labour shortages.
These dynamics will need to be navigated carefully. We need to remain an attractive destination for high-skilled workers, while still retaining our homegrown workforce.