Net migration +1060 (mom seasonally adjusted)
+21,618 (year to February 2010)
Short term visitor arrivals -1.9% mom
Net migration continues at a firm pace, recording net 1,060 new migrants over February, although showing some sign of softening. The annual pace of inflow is now easing from its peak, recording 21,600 new migrants over the year to February, compared to 22,600 in January. The slowing pace of migration comes as permanent departures have started to recover, rising 7.2% in February. This pick up has been underpinned by a recovery in departures to Australia, a trend we expect to continue over 2010. The Australian economy has fared comparatively well through the global downturn, managing to avoid recession. Employment growth there over the past 6 months has been robust, in contrast to rising unemployment in NZ. The more favorable economic outlook will continue to draw New Zealanders across the Tasman: we expect the monthly pace of departures will recover from 5,250 per month currently to 6,500. The annual pace of net migration is likely to slow from 22,000 per year, to around 10,000 per year.
Short-term visitor arrivals fell 1.9% in January. Nonetheless, the current trend level in visitor arrivals remains firm. Australian visitor numbers remain steady, after strong growth over the second half of 2010. We expect Australian visitor arrivals to remain firm, as the lower NZD/AUD makes New Zealand a relatively cheap alternative for Australian holiday makers. Encouragingly, there also appears to be an improvement in Asian visitor arrivals over the past few months. The increased interest has been broad based, with a rise in Japanese, Korean and Chinese numbers. However, StatsNZ have noted extra caution should be applied to interpreting Chinese visitor arrivals, as the typical seasonal pattern has been disrupted by the change in timing of Chinese New Year.
We expect the pace of net migration to slow over 2010, and the recent pick up in departures to Australia confirm this trend is developing. The slower pace of net migration will remove some of the support to the housing market during the year.
The ongoing strength in visitor arrivals has been encouraging, particularly the recent increase in arrivals from Asia. Meanwhile, the lower NZD/AUD is helping NZ benefit from Australia's good fortune, increasing NZ's attractiveness as a holiday destination. We expect that strong arrivals from Australia will continue as we head into the ski season.
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