Net migration extends gains in June, tourism slump continues

Tuesday 21st July 2009

New Zealand net migration extended its gains into June as fewer New Zealanders left the country amid widespread unemployment in Europe and the US, while the global economic slump continued to weigh on inbound tourism.

Seasonally adjusted, permanent and long-term arrivals exceeded departures by a net 1,700 migrants in June, down from the 2,690 in May, according to Statistics New Zealand. Short-term visitor numbers fell 5% to 135,200 from June last year as the decline in Asian tourism outpaced gains in Australian visitors.

“Rising net migration will help provide a floor on demand for housing and retail spending, at a time when these sectors are cyclically very weak,” said Jane Turner, economist at ASB Bank. “We expect that visitor arrivals will remain weak over the next year, with the global economic recession reducing demand for travel.”

Strong immigration has stoked the housing market at a time when the first economic recession in a decade sapped issuance of building consents. This month, central bank Governor Alan Bollard reiterated his warning that signs of stabilisation in property could weigh on the economy if it spurred people to take on too much debt.

Housing has been an area of optimism for the New Zealand economy with low interest rates and short supply turning it into a sellers’ market.

Last month, Immigration Minister Jonathan Coleman took credit for ending the so-called “brain drain” to Australia and the UK last month when net migration surged to a six-year high, saying it would help stimulate retail and housing sectors.Meanwhile, tourism continued to take a hit in the latest data, as swine flu continued to discourage visitors from China, Korea and Japan.

The number of Japanese tourists in June sank 4,600 to 2,300 arrivals, the fewest 24 years. The number of Australian visitors to New Zealand extended its gains, rising 9% in June from the same period last year. Short-term arrivals from across the Tasman have increased in 10 of the past 12 months.

“With Australia weathering the economic downturn better than most, Australian arrivals should remain reasonably firm,” Turner said.

Australia is being targeted by a $5 million marketing campaign between the government and Air New Zealand, which Prime Minister John Key has estimated may generate $65 million of economic benefits.

Shares in the country’s national carrier rose 2.2% to 95 cents on the NZX 50 index today, and have declined 5.2% in the year-to-date as rising fuel costs and the influenza pandemic weigh on long-haul flights. Auckland International Airport rose 1.9% to $1.58 in trading today.

Businesswire.co.nz

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