Migration boost to help construction industry - eventually

Visitor numbers fell 10pc in March. File photo / Paul Estcourt

A population boost from the number of people settling in this country due to the global economic crisis is eventually expected to be good news for the hard hit construction sector.

Figures published by Statistics New Zealand (SNZ) today show permanent and long term (PLT) arrivals exceeding departures by 300 last month, compared to a net PLT outflow of 1000 in March 2008.

The increase was mainly due to 1000 fewer PLT departures, including 800 fewer to Australia, SNZ said.

Seasonally adjusted, PLT arrivals exceeded departures by 1700 last month, up from 1600 in February and 800 in January.

Deutsche Bank chief economist Darren Gibbs said that compared to March 2008, the net inflow of non-New Zealand citizens was little changed, but net departures by New Zealand citizens fell to the lowest level seen in a March month since 2004.

In light of the deep recession and job losses in most of this country's key trading partners, he thought it was likely net migrant inflows would continue to swing back heavily in New Zealand's favour.

He expected that would continue to mainly reflect the impact on flows of departing and, increasingly, arriving New Zealanders.

But weak economies offshore and a low nominal exchange rate would also add to the attractiveness of this country to potential non-New Zealand migrants, Mr Gibbs said.

"Over time, if history is any guide, strengthening migrant inflows will play an important role in reinforcing what is likely to be a strong recovery in housing activity (as unlikely as that may seem at present given the weak state of the domestic economy)."

ASB economist Jane Turner said the recent turnaround in net migration had come from a drop in departures, mostly to Australia but also to Britain, reflecting weakening job prospects in those countries.

She expected that while arrivals had been relatively steady so far, they would see a small pick up, particularly from Britain and the United States. That was because the New Zealand economy, and labour market, was expected to fare comparatively well through the global downturn.

Annual migration inflows were likely to reach 10,000 to 15,000 a year, providing some support to population growth and to cyclically weak areas such as retail spending and housing construction.

Today's data showed a 2300 net outflow of PLT migrants to Australia in March, down from 3100 a year earlier and 2800 in March 2007, while there was a net inflow of 500 migrants from India and 300 from China.

For the year to March, the net PLT outflow to Australia was 33,600, above the 29,900 in the March 2008 year, but down from the record net outflows of 35,400 in both the December 2008 and January 2009 years.

Altogether for the March year, New Zealand had a net migration gain of 7500, up from 4700 in the March 2008 year.

In the latest year, there were 88,900 PLT arrivals, up 5400 or 6 per cent from a year earlier, while the 81,400 PLT departures were up 2600 or 3 per cent.

- NZPA