New Zealand's population boom continues unabated - the population growth rate for 2015 will be higher than any year since 1974, at above 2%. Data last week showed that net migration remained extremely strong in September, and has now reached an all-time high in annual terms of over 61,000 people.
High population growth has been an important force in the New Zealand economy in recent years. From a business point of view, more feet on the ground has been a boon. Population growth has supported GDP growth and has clearly played a role in the housing market. But from an individual point of view, having so many bodies in the labour force has tended to suppress wages and has kept unemployment higher than it would otherwise be.
"With offshore labour markets remaining weak, net migration is likely to remain very strong over the coming year. However, from late 2016 the net migration is expected to slow down. New Zealand's economy is on the cusp of a slowdown while, in time, Australia's economy is likely to improve. Economic incentives will tend to guide people back towards Australia rather than New Zealand. It is important that businesses avoid extrapolating from today's strong rate of population growth", foresees Westpac.
