22 May 2009
Source: The Dominion Post
The highest net migration inflow for five years is a positive indicator for the economy, particularly the faltering residential building sector, economists say.
Net inflow migration figures have accelerated in the past few months with permanent and long-term arrivals exceeding departures by 2200 during April.
Statistics New Zealand figures showed the inflow was the highest for five years, on a seasonally adjusted basis.
March and February figures show a net inflow of 1700 and 1600 respectively, making the average for the three months to April more than four times the monthly average inflow between since 2007.
ASB economist Jane Turner said the figures were led by a sharp drop in departures, particularly to Australia. “With the grass no longer greener across the Tasman, more New Zealanders are opting to stay home.”
She noted that returnees from the United Arab Emirates were also up, probably because of tough times in financial boomtown Dubai and the collapse of oil prices.
“Turnaround over the past few months has been swift, and we expect the trend will continue.
“Departures are likely to remain weak for some time, and today’s data also suggest some tentative signs of a pick-up in arrivals as a result of the global economic downturn.”
Goldman Sachs JBWere strategist Bernard Doyle said the boost in overall migration numbers was a positive influence for any future economic recovery.
“Net migration was one of the key drivers behind the 2003-2007 economic upswing, and was particularly important for the construction sector. The longer net migration persists around these levels, the more optimistic we become on prospects for the domestic economy.”
UBS economist Robin Clements said the turning indicators would boost support for housing, which had been a drag on growth.
That in turn provided a hint of stabilisation for the economy in the second half of the year, which would be “the first step towards recovery”, he said.