Low migration 'good news'
5:00AM Saturday April 21, 2007
By Owen Hembry


Net migration has been lower for three consecutive months. Photo / Alan Gibson

A continued weakening in the net inflow of migrants could be good news for the Reserve Bank but is unlikely to have any effect on short-term decisions about interest rates.

Statistics New Zealand says seasonally adjusted net permanent and long-term immigration was 630 people in March.

That continued the weaker trend of 520 in February and 410 in January. The number had been more than 1000 a month from June to December.

National Bank economist Philip Borkin said it was positive news for the Reserve Bank. "It will provide less impetus to the housing market and consumer spending going forward but the thing is there's a huge lag involved in that process.

"That is not expected to translate into an easing in residential investment and construction activity until later in 2008."

The Reserve Bank's focus would still be on inflation pressures and signs that the domestic economy was still very strong, Borkin said. The latest numbers were unlikely to affect next week's decision on whether to raise interest rates.

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