When will interstate migration to Qld recover?

Over the last few years, a decline in Queensland’s population growth has reinforced the economic sluggishness we’ve seen outside of the mining sector. For example, lower population growth means lower demand for new housing. In large part, Queensland’s lower population growth is due to a sharp decline in net interstate migration (see chart below, based on ABS demographics data released in the week before Christmas). Net interstate migration is the difference between people moving to Queensland from interstate (i.e. arrivals) and people moving out of Queensland to other States (i.e. departures).

Popchange

I recall that, in the mid-nineties, Goss Government ministers used to refer to the 1,000 new Queenslanders we gained each week through interstate migration. Indeed, in the peak financial year for net interstate migration of 1992-93, Queensland received an additional 49,162 people due to interstate migration. In 2011-12, however, this had fallen to an additional 11,796 people, or around 230 new Queenslanders each week (see chart below).

NIM

The decline in net interstate migration in recent years is due mainly to a decline in arrivals from other States, rather than an increase in Queenslanders departing for other States (see chart below, noting that the gap between arrivals and departures is net interstate migration).  This suggests that, while Queenslanders don’t see any benefit from moving to other States, people in other States don’t see the benefit in moving to Queensland that they may once have. This is likely because Queensland’s economic performance, while not terrible, is not as outstanding as it once was.

arrivalsanddepartures

The State that matters most in terms of interstate migration to Queensland is NSW (see chart below), although Victoria was important in the early to mid-nineties, possibly due to a decline in the manufacturing sector and job shedding by the Victorian Government, particularly after Jeff Kennett came to power in October 1992.

Net IM by State

Victoria has been a less significant source of interstate migration over the last decade, while NSW continued to make a reasonable contribution (see figure below).

NSW and Vic

So prospects for a recovery in interstate migration depend on whether there is a recovery in net interstate migration (particularly arrivals) from NSW (see chart below).

NSW

In the short-term, over 2012-13, I don’t expect much of a recovery of interstate migration from NSW given that employment growth in both economies is expected to be lacklustre this financial year. Queensland Treasury forecasts employment in Queensland will grow 0.25% in 2012-13, while NSW Treasury forecasts employment growth of 0.75% in NSW.

Over the medium-term, however, I expect Queensland’s stronger potential for growth than NSW – owing to our resources base, better climate and availability of land – will see stronger economic growth in Queensland and a pick up in interstate migration from NSW. Based on the historical data, we might see net interstate migration from NSW pick up to around 20,000 or above, or an additional 10,000 or more people per annum. This means we might expect to see net interstate migration to Queensland in the range of 20,000 to 30,000 within a few years, if the Queensland economy performs relatively well. While this level of interstate migration would be respectable, it would still be below the high levels of the early to mid-nineties, which were due, in large part, to relatively poor economic conditions in NSW and Victoria.

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One Response to When will interstate migration to Qld recover?

  1. Jen says:

    Fascinating data. The graphs make the point really well.

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