Net Migration Peaks, Tourism Grows At Trend
Monthly data were released by Statistics NZ showing the number of people migrating in and out of NZ plus tourist flows in and out. The main interesting bits in today’s release which applied to December and therefore give a complete 2002 picture were the following.
Net migration was a record 38,200 in 2002 with immigrants up 18.4% and émigrés down 19%.
But the annual total appears on the verge of easing because in December the monthly net migration gain of 3,410 was only 10 better than December 2001 – the lowest such annual gain since February 2001.
Visitor numbers in December were a record 265,690, up 10.8% from a year ago, with the total 2002 growth at almost exactly the long term average gain p.a. of 7.1%. But December data are biased upward by one-off events and the depressed Dec. 2001. Seasonally adjusted data suggested underlying tourist number growth is at or just below the trend 7% per annum.
WHY DID THIS HAPPEN?
Record net immigration can be attributed to…
Recent strong economic growth in NZ of an estimated 4.3% during 2002 versus near 2.5% on average overseas.
Reclassifying some foreign students as migrants.
Security concerns overseas.
The return of Kiwis who may have left 5-10 years ago to enjoy booming sectors like finance, technology, and telecommunications.
Increased foreigner awareness caused by high tourist numbers.
High purchasing power of foreign money in NZ caused by the 1997-2000 currency fall.
Labour shortages causing NZ companies to actively seek foreign employees.
Acceptable/trend tourism growth will reflect factors such as…
One-off events and a structural leap in foreign travel by South Koreans & Chinese, plus “safety” of NZ offsetting..
Weak source country economic growth on average.
Low consumer confidence levels overseas.
Worries associated with geopolitical events.
WHO IS AFFECTED AND HOW?
Home owners as continuing high population growth will boost house prices.
House builders, rental property owners for the same reason.
Drivers as strong population growth will put strains on the transport system.
Retailers as strong house set-up growth will boost sales of durables like fridges etc.
Government accounts as strong population growth boosts tax receipts – yet extra infrastructure spending is also demanded.
Exporters as strong population growth underpins domestic economic activity and limits scope for interest rates to fall therefore helping to underpin the exchange rate.
Tourism operators as trend growth is good considering the fraught world scene, justifying investment and expansion.
WILL THIS CONTINUE?
We expect a smaller net population gain from migration this year than last, but still a net gain around 30,000.
Tourism growth will be
underpinned by one-off events, Lord of The Rings etc., but
in a world of below average economic growth with concerns
about war, the risk is tourist numbers grow at or less than
the trend of 7%.