According to Statistics New Zealand figures, the city recorded an estimated 1.2 percent increase in population for the 12 month period to June, 2009. This was slightly above the national average of 1.1 percent.
The increase brought the city's estimated population to 80,300.
The Council's Economic Policy Adviser, Peter Crawford, predicts the growth rate will rise further into next year. Fewer people left the city for overseas in the last 12 months and this trend is continuing in the 2009/2010 year he says.
"Statistics New Zealand's overseas migration for the September quarter records a 40 percent drop in the number leaving the city permanently to go overseas. This means the city is growing faster and arrivals from overseas outnumber those who depart," Peter says.
"There's also a gain in population from within with one of the main drivers being the number of students looking to study at our tertiary institutions."
Peter says this is endorsed by Massey University encouraging people to enrol early as courses are likely to be full for the 2010 academic year unless the government lifts the cap on enrolments.
"Based on these trends so far our population should increase by 1,000-2,000 people by June, 2010," he says. "This means more jobs throughout the city and a faster economic growth."
An example of the anticipated growth is the opening of the major Foodstuffs warehouse in Palmerston North which will see an influx of more than 30 families from the Wellington region here early next year.
Peter says another indicator of the growth taking place is the strength in retail sales and buildings consents issued in the September quarter. These show the city is coming out of the recession faster than most of New Zealand.
Core retail sales (excluding motor vehicle sales and servicing) in the September quarter increased by 5.6 percent in the city compared with the September 2008 quarter, more than double the national increase of 2.7 percent.
Building consents issued for new houses in the city increased by 106 percent in the same quarter compared to the same period last year while the number of consents issued nationally declined by 13 percent in the quarter.
The total value of commercial and residential consents issued in the quarter was 77 percent higher than last year while national consent values declined by 13 percent.
"These are impressive figures and shows that Palmerston North is one of the fastest growing provincial cities in New Zealand. Its growth far exceeds other lower North Island centres such as Wanganui, New Plymouth, Napier and Hastings," Peter comments.