New Zealand Annual Immigration Slows For Third Straight Month

(Bloomberg) -- New Zealand’s immigration slowed for a third straight month in February, suggesting a gradual softening of the population pressures that have been worrying policymakers.

Annual net immigration dropped to 130,856 from a revised 133,793 in the 12 months through January, Statistics New Zealand said Monday in Wellington. The peak was 142,159 seen in November last year.

The population surge has prompted the Reserve Bank to warn that the extra demand for houses and rental accommodation might add to inflation, while the government has labeled the situation as “unsustainable” because it is creating stress on infrastructure such as education and health services.

Signs of a peak may give the RBNZ confidence it won’t need to raise interest rates further, although the economy still has to absorb the extra people who have arrived. Immigrants have increased the labor force, making it easier for employers to find workers and taking the pressure off wage inflation.

Immigration Minister Erica Stanford this month tightened rules for work visas to include an English language component in order to reduce the numbers of low-skilled workers entering the country and potentially taking jobs that New Zealanders could do.

Adding to signs of an immigration peak, almost 47,400 non-residents departed New Zealand in the year through February. At the same time, 74,930 citizens departed.

The RBNZ and other forecasters have projected immigration will slow over the next two years, but have been confounded by regular upward revisions to the series, which reflects the way the data is compiled.

Today’s data showed unadjusted net immigration jumped to 11,651 in February. That’s the highest since September and more than twice the 5,460 net arrivals in January.

“It represents a reality check to those thinking that net immigration flows will rapidly cool,” said Mark Smith, senior economist at ASB Bank in Auckland. Part of the increase may have been students starting a new year, he said.

Still, arrivals will decline “over the next few years as the slowing economy reduces the attractiveness of New Zealand as a place to live and work,” he said.

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