Migration scramble not boosting demand

In an economic note, senior economist Mark Smith and graduate Kathryn Shearing say the recent net immigration episode is not sticking to the script.

“It is difficult to discern a demand-side boost from increased net immigration, with the economy essentially flatlining at best, a sizable per-capita recession underway, and the housing market still failing to fire,” they say.

Increased net immigration, says Smith, has coincided with surveyed easing of labour shortages, pointing to a beneficial impact on the supply side of the economy.

The migration policy pendulum is skewed towards increased immigration to plug labour shortages, but this may not always be the case, they say.