January 27, 2020

Net migration heavily revised down

On 23 January almost a quarter of New Zealand’s estimated annual net migration vanished.  

Estimated annual net migration for the year to October 2019 of 55,600, released in December 2019, had been revised down to 42,980. This is a decrease of 12,620, which is a change equivalent to almost a quarter of the previous estimate of net migration.

The revision by Statistics New Zealand dramatically changes the narrative around New Zealand’s net migration. As at the December 2019 release, the narrative was a steady inflow of around 50,000 net migrants over the next few years, with the subsequent demand for housing and higher economic activity generated by a larger population. Now there is a steady decline in net migrants with numbers likely to fall below 40,000 in 2020 and potentially continue to decline to 20,000 by 2023.

How did this happen? 

On 23 January 2020 Statistics New Zealand announced a revision of New Zealand’s net migration estimates.  The revision was due to improved linking between arrival and departures data.  The improved linking resulted in a number of people who had been provisionally classed as migrants, had their status changed to visitors.  

Impact on annual net migration

Overall, this recent revision of migration numbers had a noteworthy impact on net migration over the 12 months of data from October 2018 to October 2019.  This is shown in the figure below with annual net migration numbers showing a strong decline, compared to the previous estimates indicating an increase net migration. 

Source: Statistics New Zealand

Migration data released in December 2019 indicated that annual net migration increased from 48,330 in July 2018 to 55,600 in October 2019.  An increase of 7,270 across a period of 16 months.  This picture has now been reversed, with Statistics New Zealand data now showing that net migration has dropped from 48,280 in July 2018 to 42,980 in October 2019.  This is a decrease of 5,300 across a 16 month period.

What does this affect?

Changes in New Zealand’s net migration impact population estimates and projections derived by Statistics New Zealand.  Given our net migration has been revised downward for the last 16 months, it will result in a reduction in New Zealand’s 2018 and 2019 population estimates.

This change will have a wider effect because changes in our national and subnational population estimates are used by a range of other areas, such as housing, health, and the provision of local government services amenities.  This means that changes in population estimates will change the projected demand for these good and services and therefore alter the pressure on providers to invest in future supply.