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Photographer: Brendon O’Hagan/Bloomberg Photographer: Brendon O’Hagan/Bloomberg

New Zealand isn’t as popular as it’s been led to believe.

The nation’s immigration figures have been revised sharply lower after the statistics agency adopted new methodology, showing that net arrivals were about 45,000 fewer in the past four years than previously estimated. In a country of just 4.9 million people -- as far as we know -- that’s left analysts pondering: what does this mean for jobs and economic growth?

It could be significant. Less migrants means pressure on the property market isn’t as heavy as expected, while gauges of productivity and economic growth per capita will need to be revised higher. Fewer job-seekers could also ease pressure on wages, although economists say the labor market remains tight and there are no immediate implications for easier monetary policy.

On the other hand, policy makers have been taken aback that the nation’s jobless rate has been declining in the face of strong population growth while wage inflation has been benign. The new profile for immigration appears to offer an explanation.

“We have been constantly surprised by the strength of the labor market given how high immigration was supposed to be,” said Craig Ebert, senior economist at Bank of New Zealand in Wellington. “Going forward, that means you don’t have to forecast such strong growth in employment to absorb the number” of new arrivals.

Not So Crowded House New methodology shows sharper rate of decline in arrivals Source: Statistics NZ

The new methodology tracks peoples’ actual movements across the border to determine their migrant status, rather than relying on intentions based on departure and arrival cards.

The nation’s net immigration in the four years through October 2018 was about 220,000 persons, according to the revised data released last week. Annual arrivals have been falling steadily from a revised peak of almost 64,000 in mid-2016.

See the latest survey of New Zealand economic growth forecasts here

Statistics New Zealand expects to make some changes and revisions to fourth-quarter population estimates due in mid-February, labor market analyst Katy Auberson said in an emailed response to questions. While the changes will also flow into working-age population estimates, the fourth-quarter numbers -- the basis of next week’s jobs report -- aren’t affected, she said.

“It doesn’t get rid of migration as a story in the economy,” said Ebert. “It’s hard to see the unemployment rate jerking up because that’s not what we are hearing from companies, who see the market getting tighter if anything.”

( Updates with latest economic growth survey after 7th paragraph. An earlier version of this story corrected the chart legend. )