Recession Shuffles Global Cost-of-Living Rankings
According to a Mercer news release, a significant reshuffle of cities can be observed in this year’s ranking, mainly due to considerable currency fluctuations worldwide. The majority of European cities moved down in the ranking, as did cities in Australia, New Zealand and India.
“As a direct impact of the economic downturn over the last year we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s ranking,” Nathalie Constantin-Métral, senior researcher at Mercer, commented in the news release.
Due to the strengthening of the U.S. dollar, all cities in the U.S. have experienced a rise in this year’s ranking. New York remains the highest-ranking city in the region and has also joined the global top 10 list this year of most costly cities, jumping from 22nd to eighth place. Los Angeles is up 32 places to 23rd and Washington, D.C. is up 41 places to 66th.
U.S. cities with significant changes in ranking this year include San Francisco, moving up from 78th to 34th place; Boston, moving from 99th to 60th place; Honolulu, from 77th to 41st place; Houston, from 98th to 63rd place; and Chicago, from 84th to 50th place.
Osaka ranks second, up nine places since last year, whereas Moscow is now in third place. Geneva climbs four places to fourth position and Hong Kong moves up one to fifth place. Beijing entered the top 10 in 9th place, up from 20th in 2008. Japan now has two cities in the top 10 and Dubai has climbed 32 places to reach 20th. Johannesburg has replaced Asunción in Paraguay as the least expensive city in the ranking.
In Mercer’s survey, New York is used as the base city for the index and scores 100 points. All cities are compared against New York and currency movements are measured against the U.S. dollar. The survey covers 143 cities across six continents and measures the comparative cost of over 200 items in each location, including housing, transportation, food, clothing, household goods and entertainment.
Canadian cities have slipped down the index with its highest-ranking city, Toronto, down 31 places to 85th. Ottawa drops 36 places to 121st and Montreal is now in 103rd place, down from 72nd in 2008.
In 15th place and up 74 places from 2008, Caracas in Venezuela is the top-ranking city in South America. Sao Paolo and Rio de Janeiro have experienced a reverse move, plummeting from 25th to 72nd and 31st to 73rd places, respectively. Similarly, Bogota in Colombia has moved down from 87th to 120th place. Buenos Aires has climbed 26 places to reach 112th.
Moscow remains the most expensive city in Europe for expatriates. The next European cities in the ranking are Geneva and Zurich in fourth and sixth places, up from eighth and ninth, respectively. Copenhagen remains in seventh, and both Milan and Paris drop one place to 11th and 13th, respectively.
European cities have experienced some of this year's steepest falls in the ranking, with Warsaw plummeting from 35th to 113th place and Glasgow (129th place) and Birmingham (125th place) in the UK falling 60 and 59 places, respectively. German and Spanish cities all fell between eight and 11 places, whereas cities in Sweden, Ukraine, Czech Republic, Romania and Hungary all fell between 36 and 48 places. Oslo and London, both previously in the top 10, are now in 14th and 16th places, respectively.
While the vast majority of European cities have fallen in the rankings, most Middle Eastern cities have experienced a reverse trend. Both Dubai and Abu Dhabi have risen significantly in the ranking, moving from 52nd and 65th to 20th and 26th places, respectively. This is mainly due to the UAE dirham being fixed to the U.S. dollar, Mercer said. Tel Aviv remains the most expensive city in the Middle East, although it is the only one in the region to move down in the ranking, from 14th to 17th place.
Most African cities moved up in this year's ranking, although their index scores have decreased. Cairo jumps a substantial 44 places to 57th as the Egyptian pound fared well against the U.S. dollar.
Hong Kong ranks in fifth place and Singapore has moved up three places to reach 10th. Seoul dropped from 5th to 51st place.
The Indian rupee also suffered a significant loss against the U.S. dollar last year and all the Indian cities have moved down the ranking as a consequence. New Delhi moves from 55th to 65th place and Mumbai drops from 48th to 66th place.
Chinese cities experienced the reverse effect as the Chinese renminbi performed relatively strongly compared to most other currencies. Shanghai, Shenzhen and Guangzhou rank in 12th, 22nd and 23rd places, respectively.
Sydney remains the most expensive city for expatriates in the Australia/New Zealand region, but has dropped from 15th to 66th place. Melbourne follows in 92nd place, down from 36th. Auckland moved down to 138th place from 78th and Wellington follows in 139th, down from 93rd.
Individual cost of living and rental accommodation cost reports are produced for each city surveyed. For further information or to purchase copies of the city reports, visit www.mercer.com/costofliving or call Mercer Global Information Services at 800 333 3070.