The net inflow of long-term migrants is on the increase again. In the 12 months to February 2009 the net inflow was 6,160, a welcome increase from the trough in the latest cycle of 3,570 in the 12 months to November 2008.

The interesting aspect of this turnaround is that it has been quite rapid – a little like the 2001-02 increase. Also like 2001-02 it is being driven mostly by reduction in the number of New Zealand residents leaving for Australia, and an increase in the number of migrants arriving from Asia, especially from China and India.

It certainly looks as though the negative perception of the world is having a direct effect on the number of New Zealand residents migrating to Australia. In each month during 2007 and 2008 until October-November, the number leaving was around 500 more than it had been 12 months earlier. In last December and January the number leaving was the same as the previous one.

By February 2009 the changing momentum saw a reduction by over 1,000 in the number of New Zealand residents leaving for Australia compared with February 2008. It would seem that New Zealand residents are seeing this country as a safe haven in a storm.

By the same token, residents of Asia, especially China and India, are increasingly attracted to New Zealand. The number of migrant arrivals from Asia continued its steady climb since 2005. In the year-ending February 2009 the net inflow was 17,000.

Given that the net inflow from the rest of the world (mainly Europe and the Americas) has remained strong and was 19,000 in the year to February 2009, the main change-player is likely to be the dynamics with Australia. On previous experience it could be possible for the present net outflow of 30,000 a year to reduce quite quickly to only 10-15,000 per year.

That would drive our overall net migrant inflow back up to around 20,000 a year. The effects on demand for housing, whiteware, mortgages, cars, in fact just about anything would be a welcome lift. In fact the demand side could be expected to considerably exceed the labour supply-side effect so would not add to the number unemployed.

For the Statistics NZ Hot of the Press release click here.