Economist Brad Olsen sounds alarm on impact of surging migration on critical resources

A leading economist is warning the surge New Zealand is seeing in migration could put our critical resources under a huge amount of strain. 

Migration is coming back strongly following a couple of quiet years due to the borders being shut for the COVID-19 pandemic. 

Rapidly rising net migration has seen the working-age population increase by 1.2 percent over the last year, and a recent Infometrics analysis showed filled jobs are up around 2.7 percent over the last 12 months.

Infometrics Principal Economist Brad Olsen told AM Early on Monday the surge of people coming into New Zealand is "quite enormous". 

"Businesses have been talking about how difficult it's been to find those workers, now they're starting to come back and certainly the Government has highlighted that they were asked by business to make it easier to bring in people, and that seems to have happened," Olsen told AM Early host Nicky Styris. 

There are a range of people coming into the country but it's mainly through the Green List - which are roles that are in demand in New Zealand.

But despite the surge in migration, working holiday visas still continue to lag, which is affecting New Zealand's tourism operators. 

"It's been interesting going across the country, talking to various businesses. Construction firms are saying they're able to access more talent. When we talk to the hospitality sector, though, there's still a bit more of a challenge," Olsen said. 

"They've, of course, gone through a period where all of a sudden the borders have reopened, more people are coming in and that's exciting, but that's a lot more work to do, though, and they're still struggling to find staff. 

"So it's different a little bit across different groups, but certainly on the whole, a lot of people continuing to move in." 

Olsen believes the surge could put New Zealand's housing market under even more pressure with new figures suggesting net migration could go above 100,000 for the first time on record. 

"That's a huge inflow. In the last month alone, there were 21,000 people that came in. Those sorts of figures then highlight that our housing markets are under pressure," Olsen told AM Early. 

"Infrastructure is still not in a particularly better state. You look at the healthcare sector, it's already bursting at the seams. You add an extra 100,000 people into the system. It is going to break."

Infometrics Principal Economist Brad Olsen.
Infometrics Principal Economist Brad Olsen. Photo credit: AM

Olsen said his worry is as more and more people come into the country, it will continue to put a huge amount of strain on a range of areas.  

'I think the worry is that we've whipsawed. We've gone from -20 to maybe 100,000 within a year, a year and a half," he said. 

"That means that the entire population planning isn't really working and all of a sudden all of our critical resources are under a huge amount of strain." 

Watch the full interview with Brad Olsen in the video above.