The opening of New Zealand’s borders in mid-2022 has led to an unprecedented surge in both migrant arrivals and NZ citizen departures. The previous Government’s special 2021 Residence Visa led to a short-lived but significant increase in recent residents. In a recent article entitled What are all these migrants doing?, we looked at the industries and occupations that these new migrant arrivals and recent residents are working in. Here we look at which regions have benefitted most from this increase in the migrant labour supply.

New migrant arrivals tend to head for large population centres where jobs and amenities are more diverse and plentiful, wages are usually higher, and migrants are more likely to be able to connect with people from their home country. Between September 2022 and September 2023, the non-New Zealand citizen workforce (which includes recent residents and temporary visa holders) in Auckland grew by 41,700. This increase made up 47% of the total increase in the non-New Zealand citizen workforce across New Zealand, a disproportionately large number given that Auckland accounts for just 35% of total employment in New Zealand (see Chart 1).

Only Otago achieved a similar feat, albeit to a much lesser extent. Between September 2022 and September 2023, Otago accounted for 6.0% of the total increase in the non-New Zealand citizen workforce, above the region’s 4.9% share of total employment.

There is also diversity across the regions in terms of which type of migrant they are getting – recent residents or migrants on a temporary visa (mostly work visas). In Wellington, Manawatū-Whanganui, Waikato, Canterbury and Southland Regions, two-thirds or more of the increase in the migrant workforce between September 2022 and September 2023 were recent residents, with these regions benefitting from the special 2021 Resident Visa (see Chart 2).

In contrast, in Tasman, Marlborough, Gisborne, West Coast, Nelson, and Taranaki Regions, half or more of the increase in the migrant workforce between September 2022 and September 2023 were migrants on a temporary visa. Tasman, Marlborough, and Nelson have all seen an influx of migrants on Working Holiday Visas and Recognised Seasonal Employer Limited Visas, presumably to work in their agriculture and hospitality sectors. In Gisborne, Taranaki and West Coast, new migrants have tended to be on the Accredited Employer Work Visa and other longer-term temporary work visas.

Looking over a longer time scale, aside from Auckland, Otago, and Canterbury Regions, the share of regional workforces that are made up of migrants has now surpassed pre-pandemic levels (see Chart 3). In Gisborne, for example, 7.1% of the workforce in the year to September 2023 were either recent residents or migrants on a temporary visa, compared with 4.2% in the year to September 2019. In every region, the share of the regional workforce that is made up of recent residents has increased, which is testament to the special 2021 Residence Visa. In only a handful (Gisborne, Hawke’s Bay, Marlborough, and Tasman) has the share of the workforce that is made up of migrants on a temporary visa increased.

The COVID-19 pandemic disrupted migration flows in an unprecedented manner, but the growth in the migrant share of the workforce across all regions compared with pre-pandemic levels is just the continuation of a trend that has been evident in most regions since about 2016, albeit boosted by an influx of recent residents through the special 2021 Residence Visa, which has now pretty much run its course.

Looking forward, as New Zealand citizens continue to move overseas and international migrants continue to see New Zealand as a desirable destination, our workforce will continue to become more ethnically diverse. Of course, the extent of diversity also depends on other factors such as the number of young New Zealanders entering the workforce and older New Zealanders choosing to remain in work longer.

The National Government’s attitude towards immigration seems broadly to be about making it easier for immigrants to obtain a visa. National's coalition deal with New Zealand First seeks to “improve the accredited employer work visa to focus the immigration system on attracting the workers and skills New Zealand needs". National's coalition deal with ACT promises to introduce a five-year, renewable, parent category visa. The new government has also promised to remove median wage requirements for holders of skilled migrant category visas, as well as to make it easier for family members of visa holders to work in New Zealand.

Economic factors will also play a part. As the labour market softens in 2024 and 2025, and job openings become harder to come by, we expect net migration to ease, falling below 30,000pa by 2026. Although the global economy is also set to remain soft during this period, New Zealand’s weaker relative performance could see departure numbers remaining reasonably elevated, particularly when higher relative incomes, a lower cost of living, and better housing affordability in Australia are taken into account.