Although a lot of the discussion around migration over the last year has focused on the record high inflows into New Zealand, the outflow of people from New Zealand has now also lifted to a record high, 11% above the previous maximum in 2011/12.

The implications of elevated departure numbers can be very different from elevated arrival numbers, in terms of the age profile and regional distribution. In this analysis, we explore current trans-Tasman migration flows, as well as the age of who’s arriving and leaving, and conclude that the current outflow of people is likely to be having a negative effect on the potential workforce across most parts of New Zealand.

The 2014-2018 period saw solid economic growth and relatively strong migration, with annual net migration averaging a net inflow of 54,592pa. We have used this period as a benchmark for comparison throughout this article.

Data up to September 2023 shows departure numbers from New Zealand to both Australia and the rest of the world sitting 23-24% above their 2014-18 average (see Chart 1). So although the lure of higher incomes and more affordable living costs in Australia has been seen as a key driver of the increasing flow of people leaving New Zealand, other factors are at play as well.

In particular, there is likely to be an increased number of young people going on their OE, making up for their inability to travel during the pandemic, now that COVID-19 and the associated travel uncertainty are not a constraint on people’s movement. There is possibly also some reversal of the flight to safety that we saw during the pandemic, when Kiwis who might not otherwise have returned to New Zealand were drawn back because of our isolation and freedom of movement within the country (at least between mid-2020 and mid-2021).

One of the interesting aspects of Chart 1 is that the fall in arrivals from Australia to New Zealand has been an even bigger driver of the decline in New Zealand’s trans-Tasman net migration position. We reiterate that these figures are only up to September 2023, because Stats NZ has cross-matched its data with migration figures from the Australian Bureau of Statistics, and the latter numbers are relatively slow to be released. Since September last year, total annual departure numbers from New Zealand have lifted by another 28,300, suggesting that increasing departures from New Zealand are once again likely to be the biggest driver of the trans-Tasman migration flow.

Chart 2 demonstrates there is a definite correlation between trans-Tasman migration and the relative labour market performances in New Zealand and Australia. Between 2014 and 2018, Australia’s unemployment rate was on average 0.7 percentage points above New Zealand’s rate, dissuading people from leaving New Zealand and encouraging a larger-than-usual flow back in this direction. However, the latest figures for the March 2024 quarter show that Australia’s unemployment rate is now 0.4 percentage points below New Zealand’s rate – the worst relative result, from New Zealand’s perspective, since 2012. It’s little wonder that more people are looking for better opportunities across the Tasman.

With both arrival and departure numbers highly elevated, Chart 3 compares the age breakdown of migrants over the last year (to April 2024) with our 2014-2018 benchmark. Arrival and departure numbers are higher for every age bracket than they were last decade (higher departure numbers over the last year than during the 2014-18 period are shown as a negative number in Chart 3), with the chart showing that the biggest increases have generally occurred in the 25-44-year-old age brackets. It’s also interesting to note the increased outflows of people aged 55 and over, even though the numbers are nowhere near as significant.

Drilling down below the nationwide level, the distributions of international arrivals and departures vary greatly by city and district. For example, one of the most well-known migration skews at a regional level is that Auckland represents 33% of the nationwide population, but it attracts a much higher proportion of foreign arrivals (55% between 2014 and 2018). In fact, during the 2014-18 period, only four areas attracted a higher share of non-NZ immigrants than their share of the existing nationwide population (Auckland, Christchurch, Queenstown-Lakes, and Wellington).

Both Kiwi departures and foreign departures are also biased towards a small number of areas, while Kiwi arrivals are spread a bit more evenly across the country. However, because these other flows are significantly smaller than foreign arrivals (24,000-82,000 over the last year, compared to 204,000 foreign arrivals), the effects on population growth at a city and district level are much less marked.

Chart 4 shows the estimated effects of current net international migration flows on population growth over the last year, relative to a benchmark of each city and district recording a share of arrivals and departures equal to its share of the existing population. Notably, all areas except five cities or districts are experiencing less of a boost to their population than the headline nationwide migration numbers would suggest.1

Based on these estimates, there is a clear (and unsurprising) trend whereby most parts of the country are not seeing the population boost that might otherwise be implied by the headline migration figures. If we take these figures alongside the age breakdown of migrants entering or leaving the country, it seems likely that much of the country is experiencing a relative drain of its workforce of 25-44-year-olds. And apart from a few urban areas and tourism-intensive hotspots, those losses are not being mitigated by an inflow of similarly aged people from overseas.

The softening labour market and the government’s recent tightening of the Accredited Employer Work Visa scheme will see the trend in arrival numbers of non-NZ citizens continue to ease throughout the rest of 2024 and into 2025. But the weakening labour market also threatens to drive further increases in the flow of Kiwis heading overseas, raising questions about the potential workforce in many parts of the country. An updated version of our migration outlook will be available to subscribers in our upcoming forecast release on 19 July.

1 These figures assume the same distribution of arrivals and departures over the last year as occurred during 2014-18, which might not be the case given the effects of the pandemic in the intervening period. However, we have also compared these results against the net international migration figures for cities and districts published by Stats NZ for the June 2023 year. The biggest discrepancies (noting that the mix of flows has changed further since mid-2023) are for Hamilton, Palmerston North, Westland, Mackenzie, and Invercargill (more positive in the 2023 data) and Christchurch (less positive in the 2023 data).