Visitor arrivals hit 2.5 million

Photo / Dean Purcell

Annual visitor arrivals to New Zealand hit the 2.5 million mark last month for the first time, says Statistics NZ.

"This milestone was almost reached in 2008, but the global economic downturn contributed to a decline in visitor numbers after a peak of 2.497 million in the March 2008 year," population statistics manager Bridget Hamilton-Seymour said this morning.

The 2 million visitor mark was reached in the November 2002 year, and the 1 million mark in the April 1992 year.

Visitors from Australia accounted for 1.119 million or 45 per cent of all visitors in the June 2010 year. A further 25 per cent of visitors came from four countries; the UK(248,900), the US(194,000), China (105,200), and Japan (83,600).

June visitor arrivals were up 8 per cent from the same month last year, with more people arriving from Australia and a recovery in numbers from China, Japan and Korea. Arrivals from these countries in June last year were particularly hit by the H1N1 pandemic.

Looking at the visitor numbers, Goldman Sachs JBWere economist Philip Borkin said Australian arrivals remained at elevated levels, up 7.9 per cent year on year, but the rate of growth had moderated.

"There is also a clear sign of Asian arrivals rebounding from swine flu- induced weakness, with Korean, Chinese and Japanese arrivals up 33 per cent year on year," he said.

Borkin said he forecasted arrivals growth to slow to 1.1 per cent in the 2011 financial year.

"This is largely a result of a continued moderation in arrivals from Australia (albeit off high levels). Arrivals from the UK and Europe are also expected to remain subdued, which will likely weigh on the total tourist spend."

Arrivals growth should pick up to 6.1 per cent in the 2012 financial courtesy of the boost provided by the Rugby World Cup, said Borkin.

Today's statistics also include migration numbers, which show the lowest monthly immigration figure since it November 2008.

On a seasonally adjusted basis, net permanent and long-term migration (arrivals minus departures) was 100.

Statistics NZ said that on an unadjusted basis, there were 500 fewer arrivals of non-New Zealand citizens and 900 more departures of New Zealand citizens compared with June 2009.

The annual net migration gain was 16,500 in the June 2010 year, down from the recent peak of 22,600 in the January 2010 year.

The main inflows of migrants were from the United Kingdom, India, and China.

There was a net outflow of 15,900 migrants to Australia, well down from 28,700 in the June 2009 year.


ASB Bank economist Jane Turner said the rapid slowing of migration was not expected.

"The decline in net migration has been a result of a sharp increase in departures, particularly to Australia, as well as a sudden slow down in arrivals," she said.

"The fall in arrivals appears to be concentrated in those requiring work permits, reflecting the weaker NZ labour market."

Prior to the recession, New Zealand's labour market was extremely tight with acute skill shortages, so employers looked offshore to fill vacancies.

"However, labour demand has eased back over the past year and as a result we are now seeing fewer permanent arrivals, particular from the UK, South Africa, Japan, Fiji, Samoa, and the Philippines," said Turner.

Permanent departures, particularly to Australia, had been lifting strongly, while departures to the UK also appeared to be recovering.

The sharp slowdown in net migration will reduce support for the housing market over the next year," said Turner. "We continue to expect further recovery in residential construction for the time being, reflecting the strength of net migration over the previous year. However, the sharper than expected slow down in recent months brings into question the strength and longevity of this recovery."

In the upcoming review of the Official Cash Rate, the Reserve Bank might "look a bit closer at its relatively upbeat residential investment forecasts, given signs of slower population growth".

Despite this, the Reserve Bank was likely to remain reasonably comfortable with the slowing household sector, as it has been looking for a rebalancing in economic growth for sometime.

Philip Borkin said the possibility of net migration turning negative over the coming months could not be ruled out.

Borkin said that while the moderation in net migration was not unexpected, the pace with which it was occurring - and particularly as it was being largely driven by fewer arrivals - was a surprise.

"It is of course not out of the question that we will see net flows turn negative over the coming months," he said. "Clearly this removes a source of support for domestic demand and the housing market. While it is unlikely to be a major concern yet, it also may intensify some of the difficulties some businesses are reporting in finding skilled staff."

- NZ HERALD