Bankers Returning as Kiwi Diaspora Lured Home by Prospects: JobsTracy Withers
David Lewis considered jobs in Australia and Asia before moving back to his homeland of New Zealand in February after more than a decade abroad.
“Things in the New Zealand economy were looking much more positive than they’d been for a while, particularly in financial services,” said Lewis, 34, who worked for Bank of America Corp.’s Merrill Lynch in Sydney for three years before joining fund manager Milford Asset Management Ltd. in Auckland. “Australia had a great period for a long time with the resources boom, but as that started to mature, it was clear there were challenges.”
New Zealand’s growth rate is forecast to outpace Australia’s for the next two years, helping stem an exodus that’s resulted in the highest proportion of its people living overseas in the developed world after Ireland. While the return of workers to rebuild quake-devastated Christchurch will help ease labor shortages, the influx adds to the Reserve Bank of New Zealand’s worries about overheating the booming housing market.
“The RBNZ will be watching migration flows to Auckland with increasing nervousness, as the already hot housing market needs no further demand stimulus,” said Mark Smith, senior economist at ANZ Bank New Zealand Ltd. in Wellington. Prices in Auckland rose 14 percent in July from a year ago, the Real Estate Institute said yesterday.
Permanent arrivals exceeded departures in June by the most in more than four years, according to the statistics bureau. Arrivals from Australia were the highest since records began in 1996, while departures were the lowest since September 2010.
Central bank Governor Graeme Wheeler on July 25 noted “growing momentum” in the housing market and rapid house-price inflation in Auckland and Christchurch. He said he expects to keep the benchmark interest rate at a record-low 2.5 percent through the end of the year, and that “removal of monetary stimulus will likely be needed in the future.”
Traders are betting Wheeler will raise rates as early as January while Australia’s move in the opposite direction. New Zealand’s currency rose to 89.3 Australian cents on Aug. 1, the highest since late October 2008, as investors bet the Reserve Bank of Australia will cut borrowing costs below New Zealand’s by the end of the year. It bought 87.5 Australian cents at 11:45 a.m. in Wellington.
Wheeler personifies the trend of returning expats. He took his post last year after working overseas for 15 years, including 13 years at the World Bank.
Prime Minister John Key worked abroad from 1995 to 2001 as a senior foreign exchange manager at Merrill Lynch. As opposition leader in 2008, Key pledged to revive the economy and stop the exodus, recording a pre-election advertisement in an empty 35,000-seat stadium to highlight the number of people leaving for Australia each year.
The outflow declined to about 31,250 in the year ended June 30, from a record 39,800 in the prior 12 months.
Many of the nation’s young have been attracted to Australia by opportunities in a country with about five times New Zealand’s 4.4 million people and an economy 10 times larger. In 2011, there were at least 700,000 New Zealanders living overseas, equivalent to 16 percent of the nation’s population. That compares with about a quarter in Ireland.
Since 1973, Australia and New Zealand each have admitted the other’s citizens to visit, live and work without the need to apply for authority to enter. More than a quarter of New Zealand’s university graduates in 2003 left for at least a year before 2010, and 15 percent were still overseas at the end of that year, according to a Labor Department report.
New Zealand’s economy is forecast to grow 2.6 percent this year and 2.9 percent in 2014, faster than Australia’s 2.5 percent this year and 2.8 percent in 2014, Bloomberg surveys of economists show. Australia’s Treasurer Chris Bowen on Aug. 2 cut the estimate for his country’s growth for the year to June 30 to
2.5 percent from 2.75 percent seen May 14.
New Zealand employers are expected to add about 94,000 jobs in the two years through March 2015, the central bank forecast in June. That would be the most since 101,000 were created in the two years ended June 2007. By contrast, Bowen forecasts Australia’s unemployment will rise to a more than decade-high
Pete Gillespie, co-founder of Wellington brewery Garage Project, spent 20 years overseas, including stints at beer makers in the U.K. and in Sydney. When planning to set up his own business, he said he was discouraged by legal obstacles in New South Wales, Australia’s most populous state.
“The bureaucracy was appalling and in the end we came over here,” he said. “There was an element of lifestyle. But the main motivation was the business opportunity.”
Companies are also recognizing opportunities to relocate to New Zealand, where wages are 40 percent lower than Australia’s. Melbourne-based CallActive is establishing a call center in Wellington, the capital, where it says it can offer customers a 30 percent cost saving, according to its website. It expects to hire as many as 200. Australia & New Zealand Banking Group Ltd. in May said it would move 70 call-center jobs to Wellington.
In the year ended in June, a net 7,900 people settled in New Zealand permanently. Annual migration may accelerate to 20,000 by early next year, exceeding earlier forecasts of 13,000 by mid-2014, the Treasury Department said in an Aug. 6 report.
That’s a reversal from two years ago, when as many as 4,600 people a month left for Australia in the wake of the February 2011 earthquake in Christchurch, which killed 185 people and destroyed more than 6,000 homes. Now the NZ$40 billion ($32 billion) rebuilding of the city and the surrounding Canterbury region is luring foreign laborers and expats.
Employment in Canterbury rose by 16,800 in the second quarter from a year earlier, the nation’s statistics agency said Aug. 7. The second-quarter jobless rate in Canterbury was 4.4 percent compared with 6.4 percent nationwide.
“Canterbury was the initial source of growth but it takes time for that to convert into jobs,” said Craig Ebert, senior economist at Bank of New Zealand Ltd. in Wellington. “We would be surprised if we didn’t see more generalized jobs growth nationally over the next 12 to 18 months.”
New Zealand is also proving more attractive for bankers. Vacancies listed in banking, finance and life insurance rose 10 percent in the second quarter from a year earlier, according to Trade Me Ltd., the nation’s most-visited jobs website.
Trading on the kiwi exchange in the six months through June surged 56 percent from a year earlier, buoyed by the initial public offerings of companies such as state-owned Mighty River Power Ltd.
Recent listings “are important for momentum in the industry and for putting New Zealand on the map more for international investors,” said Milford’s Lewis, who helps manage an income fund of bonds and high yielding stocks.
The benchmark NZX-50 index has gained 11 percent this year, the best performer in Asia ex-Japan and beating the S&P/ASX 200 index’s 9.9 percent gain.
“In terms of investment banking, the teams over here are busier than they are in Australia,” said Patrick Nugent, resourcing manager at Debbie Graham and Consultants Ltd., a Auckland-based recruitment firm that specializes in financial services. “The feeling in Australia is that the economy is softening.”
For those seeking regional roles, New Zealand is not an option. Sue Trinh, senior currency strategist at Royal Bank of Canada in Hong Kong, moved from Wellington to Sydney seven years ago and transferred to Asia in 2010. She said she has no plans to ever settle in New Zealand again, citing brighter job and lifestyle prospects in Sydney.
“Financially, the opportunities are far greater that they are in New Zealand,” she said. “Home for me is Sydney now. I can’t see myself going back to New Zealand to settle down.”
Diane Grayson shifted to Wellington from her hometown of Sunderland in the U.K. with her husband in November, not wanting her two young children to grow up in a region of high unemployment. Now the general manager of the Wellington unit of Regus Plc, the world’s largest operator of serviced offices, Grayson asked for an overseas position after five years working for the company in the U.K.
“Regus offered Australia straight away, there were plenty of positions there and I could have got there much faster but I held out for New Zealand,” she said, encouraged by experiences enjoyed by two relatives who moved there in the early 1980s. “That was top of our list.”