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Permanent long term (PLT) arrivals exceeded departures by 1,950 on a seasonally adjusted basis in January, up from 1,720 in December 2009, Statistics NZ figures show. Actual net migration of 2,539 in January was more than double the 1,204 seen in January a year earlier and at its highest level since 2004.

However, the trend of emigration by New Zealanders has turned in the last three months, raising fears another exodus of Kiwis to Australia is about to begin as wages rise and jobs are offered across the Tasman. (Update 1 includes comments from ASB economist Jane Turner).

Net migration has surged to six year highs in the last year as fewer New Zealanders left to live in Australia and more New Zealanders returned from overseas, although actual arrivals of non-New Zealand migrants has fallen in the last year. This surge in net migration has been cited by some in the rebound in house prices between March 2009 and December 2009.

Total net migration in the year to January was 22,588, up from 4,538 in the year to January 2009 as departures slumped by more than 20,000, more than offsetting a fall in arrivals of around 2,000. Arrivals of New Zealand citizens returning rose to 26,323 in the year to January from 23,808 the previous year.
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By Roger J Kerr

There were no surprises with the weak employment data last week, causing both interest rates and the NZD to decrease.

Yet again the moneymarkets and bank economists have been forced by the economic facts to push their timing of OCR interest rate increases back to June/July form the previous March/April predictions. Go back a couple of months to early December a number of the bank economists were confidently predicting the first OCR increase in January 2010.

Unfortunately you never see any explanation as to why those forecasts were so wrong.

These interest rate forecasters are either just guessing with these very changeable predictions, or they are just so removed from what is actually happening in NZ businesses and industry sectors that their economic theory always dominates over the reality.
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By Roger J Kerr

Some questions and some answers from the world of interest rate markets, banking and borrowing (format pilfered from broadcaster Paul Holmes).

Q: Will RBNZ Governor Alan Bollard come up with some workable suggestions/answers to the Government’s request on how to lower bank lending margins?
A: What do you think?

Q: The Government are correctly pointing out that the manufacturing/productive sector industries in New Zealand have been in recession for five years i.e. contracting since 2004. What caused this to happen, who is accountable and could it have been prevented?
A: Ask Alan Bollard, he was running monetary policy through this period and thus determining interest rate and exchange rate levels that forced many of the manufacturers to leave town. Two official enquiries, one into the monetary policy framework and the other seeking additional measures to control inflation over this period came up with the view that everything was fine and dandy, and there was nothing more than could have been done – Yeah Right!?
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ANZ National economists said in their latest ‘Market Focus’ that New Zealand did not face a housing shortage at the national level despite the developing situation of excess housing demand. The economists argued there had been “sufficient excess supply in the past few years to absorb the rise in housing demand in the short-term.”

However, they did argue that in some regional cases, such as in Auckland, the situation was different from the overall national experience, with a persistent excess demand situation (in Auckland) over the past few years.

Many commentators and real estate watchers have been pointing to an apparent shortage of housing stock – as net migration rises and building consents fall – as a factor to why house prices will not fall further from current levels. Prices rose significantly between 2003 and 2007. Since then the latest QV index figures show house prices are down 10.7% from their peak in January 2008.

The ANZ economists pointed out that the recent collapse in the number of building consents issued, along with the rise in net migration, meant that an excess demand situation for housing had developed. “On the face of it, this would point to upward pressure on house prices.”

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New Zealand had a net increase in permanent and long-term (PLT) migration of 313 in March 2009 in actual terms, as more Kiwis returned home and more Chinese and Indian migrants arrived. The monthly net migration compares to net outflows of 1,000 in both March 2008 and 2007.

Seasonally adjusted net migration rose to 1,720 in March from 480 a year ago.

Statistics New Zealand (Stats NZ) said that the net increase for March was due to 1,000 fewer permanent and long-term departures, including 800 fewer departures to Australia than in March 2008.

A total 1,756 New Zealand citizens returned home in March on a PLT basis, up from around 1,550 in both March 2008 and 2007. Non-citizen PLT arrivals rose by about 100 from March 2008 to 4,861.

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By Rodney Dickens

In our pay-to-view reports we regularly present seasonally adjusted data for the likes of house sales, residential building consents and migration but understandably to a number of people we are talking gobbledegook when we refer to seasonally adjusted data. So this Raving takes an educational bent in explaining why some data are adjusted for seasonal patterns and how to interpret seasonally adjusted data using insightful real world examples and plain English.

The monthly number of people arriving in NZ on a permanent or long-term basis exhibits classical seasonal behaviour. The number of arrivals peaks in January in most years while it is always also elevated in February and occasionally peaks in February. The number of arrivals is normally at its lowest in May and occasionally in April.

Understandably more people like moving to NZ in the peak of summer than heading into winter. Mathematical packages have been developed that remove the seasonal pattern from the data, with the resulting adjusted data showing if the number of arrivals are higher or lower than normal for the particular time of year (e.g. is the peak number in January higher or lower than normal?).

The seasonally adjusted data can be a bit noisy or volatile if the seasonal pattern in the actual data isn’t stable and/or the actual data are volatile. So as well as seasonally adjusting data to get a better understanding of what is happening to the underlying trend in the numbers we often also take two-month or three-month averages.

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