Nov. 23 (Bloomberg) -- New Zealand’s annual immigration growth accelerated to the highest level in more than five years in October, adding to signs consumer spending and demand for housing may speed the economy’s recovery from a recession.

The number of permanent migrant arrivals exceeded departures by 18,560 in the year ended Oct. 31, Statistics New Zealand said in a report released today in Wellington. That’s up from 17,043 in the 12 months through September and is the most since the period ended August 2004.

Reserve Bank Governor Alan Bollard last month said rising house prices and a gradual pickup in household spending were buoying the economy, which grew for the first time in six quarters in the three months ended June 30. Retail spending rose in the third quarter as consumer confidence increased to a 22- month high.

“Net migration will continue to provide underlying support for domestic demand,” said Khoon Goh, senior economist at ANZ National Bank Ltd. in Wellington. “The demand impulse is less compared to past migration booms, but it is still positive for the economy.”

New Zealand’s dollar bought 72.22 U.S. cents at 11:40 a.m. in Wellington from 72.37 cents immediately before the report.

Bollard said on Oct. 29 he is unlikely to raise the official cash rate from a record-low 2.5 percent until the second half of 2010 because the economy needs more stimulus. Economists say the pace of the recovery may prompt him to raise interest rates earlier.

Departures Drop

Five of 13 economists surveyed by Bloomberg News expect a rate increase in the first quarter and six say Bollard will begin increasing borrowing costs in the second quarter. Two expect he will wait until after June 30.

The increase in net immigration has been boosted by fewer New Zealanders heading overseas. About 15,600 fewer citizens left in the year ended Oct. 31 compared with the year earlier, the statistics agency said.

Permanent departures fell 18 percent in the year ended Oct. 31, today’s report showed. Arrivals fell 0.7 percent.

Analysts monitor a monthly, seasonally adjusted series to determine the pace of immigration. In October, a net 2,120 migrants arrived compared with 1,860 in September.

Tourist arrivals declined in October, which may slow spending in an industry that makes up about 10 percent of the New Zealand economy.

Tourist Arrivals

Short-term visitor arrivals fell 0.7 percent, seasonally adjusted, from September, the agency said.

From a year earlier, unadjusted arrivals increased 7.7 percent, buoyed by visitors from Australia.

The global recession has cut international air travel, reducing tourist arrivals from Asia and Europe. The outbreak of swine flu also made people reluctant to travel earlier in 2009.

Arrivals in the 12 months ended Oct. 31 fell 1 percent from a year earlier, led by a 38 percent plunge in tourists from South Korea and large declines in visitors from Japan, China, the U.K. and the U.S.

Annual arrivals from Australia rose 9.7 percent after the government targeted that nation with extra marketing. Excluding Australia, visitors slumped 7.9 percent.

To contact the reporters on this story: Tracy Withers in Wellington at twithers@bloomberg.net

Last Updated: November 22, 2009 17:54 EST