Net long term migration slumps 44% in February from January (Update 1)

Net long term migration slumped 44% to 1,050 in February from 1,860 in January on a seasonally adjusted basis as fewer foreign students and those with working visas arrived, while more non-New Zealand citizens left, Statistics NZ figures show. (Update 1 includes comments from Economist Jane Turner) Actual net long term migration fell to 2,612 in February from 3,582 in February a year ago, while the trend measure of net migration fell to 1,480 in February from 1,600 in January. Net migration has been falling on a trend basis since it peaked at 1,980 in May last year as the number of New Zealanders leaving for Australia has picked up again in recent months and the number of foreigners migrating here has dipped. Housing market watchers keep a close eye on net migration figures given its close connection to demand for housing, particularly in Auckland where many migrants arrive first. The turnaround in the net migration trend in late 2009 and early 2010 has combined with concerns about new property taxes in the May 20 budget and increases in interest rates to dampen activity and price growth in the housing markets through February and March. Permanent long term (PLT) arrivals are down 3,600 from the month of February a year ago. However, departures of New Zealand citizens continued to decrease down, 600 compared with a year ago. On a seasonly adjusted basis, permanent and long-term arrivals exceeded departures by 1,000 in the month of February 2010, down from 1,900 last month, Stats NZ figures show. A decrease in seasonally adjusted arrivals and an increase in departures are reasons for the lower net figure for February 2010, Stats NZ said. Annual PLT net migration figures were up in the February 2010 year at 21,600 compared with 6,200 in the year ended February 2009. PLT departures were down 19,200 (23 percent) in the year to February 2010 from the February 2009 year. Over the same period, there were 84,800 PLT arrivals, down 3,800 (4 percent). See the full release from Statistics NZ below:

This decrease in the net migration gain was mainly due to 1,200 fewer arrivals of non-New Zealand citizens, which included fewer arrivals on work and student permits (each down 400). At the same time, there were 400 more departures of non-New Zealand citizens. However, departures of New Zealand citizens continued to decrease, down 600 compared with February 2009. This decrease included 400 fewer PLT departures to Australia.The annual net migration gain was 21,600 in the February 2010 year, up from 6,200 in the February 2009 year, but down from the 22,600 recorded in the January 2010 year. The January year figure was the highest net migration gain since the May 2004 year (24,000). Net inflows of migrants in the February 2010 year were from the United Kingdom (8,600), India (5,700), China (3,600), and the Philippines (2,100). A net outflow of 15,400 people to Australia was recorded; well down from 34,400 in the February 2009 year and the lowest annual net outflow to Australia since the December 2004 year (14,700). Visitor arrivals numbered 267,900 in February 2010, up 11,300 (4 percent) from February 2009. Most of the increase was from China (up 4,900 or 41 percent), Taiwan (up 2,300 or 188 percent), and Hong Kong (up 1,700 or 111 percent). This increase was largely due to Chinese New Year falling in February in 2010, but January in 2009. This holiday period is a popular time for people from these countries to travel. In the February 2010 year, there were 2.482 million visitor arrivals, 57,200 (2 percent) more than in the February 2009 year (2.425 million) and similar to the year ended February 2008 (2.485 million). Visitors from Australia were up 119,300 (12 percent) for the year, but this was partly offset by large decreases in visitors from Japan, Korea, the United Kingdom, and China. New Zealand residents departed on 104,000 short-term overseas trips in February 2010, up 7,300 (8 percent) from February 2009 but below the 07,900 trips in February 2008. For the February 2010 year, short-term departures of New Zealand residents numbered 1.927 million, down 22,500 (1 percent) from the previous year. This decrease included 13,200 (8 percent) fewer trips to Europe.

Comment from ASB Economist Jane Turner: 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. Implications 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.