Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), has released its 24th annual Cost of Living survey. According to the survey, Hong Kong has passed Luanda to take the top spot as the world’s most expensive city for expatriate assignments, pushing the capital of Angola to sixth position.
Tokyo and Zurich are in second and third positions, respectively, with Singapore in fourth, up one place from last year. Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (5), Shanghai (7), N’Djamena (8), Beijing (9) and Bern (10). The world’s least expensive cities for expatriates are Tashkent (209), Tunis (208) and Bishkek (207).
“Factors like instability of housing markets and inflation for goods and services contribute to changes in the overall cost of doing business in today’s global environment and properly compensating employees on international assignments is crucial for organizations,” said Mario Ferraro, Mercer’s Global Mobility Practice Leader – Asia, Middle East, Africa and Turkey.
“Asia’s cities, and in particular Chinese cities, have shown strong performance in terms of Cost of Living rankings, mainly due to currency fluctuations. Nevertheless, companies are still moving top talent around the globe in response to skills shortages,” he added.
According to Mercer’s 2018 Global Talent Trends research, 44% of c-suite executives across the globe report that improving the ability to move jobs to people and people to jobs is one of the top two talent investments that would have the most impact on business performance in the next few years.
“With technology advances and the importance of a globally connected workforce, deploying talent remains a key component of a multinational’s business strategy,” said Ilya Bonic, President of Mercer’s Career business. “While a mobile workforce allows organizations to achieve greater efficiency, utilize top talent, and be cost effective with international projects, volatile markets and slowing economic growth in many parts of the world require them to carefully assess expatriate remuneration packages.”
Mercer's widely-recognized survey is one of the world’s most comprehensive and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons and currency movements are measured against the US dollar. The survey includes over 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
This year, Hong Kong (1) emerged as the most expensive city for international assignments both in Asia and globally as a consequence of Luanda’s drop in the ranking due to the weakening of its local currency. The global financial center is followed by Tokyo (2), Singapore (4), Seoul (5), Shanghai (7), and Beijing (9).
Slagin Parakatil, Principal at Mercer with responsibility for compiling the survey ranking said, “The strengthening of the Chinese yuan pushed Chinese cities up in the ranking, however, most cities in Japan fell in the ranking due to the weakening of the Japanese yen against the US dollar.”
Mumbai (55) is India’s most expensive city, followed by New Delhi (103) and Chennai (144). Kolkata (182) and Bengaluru (170) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (52) jumped fifteen places from last year. Kuala Lumpur (145) also rose in the ranking, up twenty places, while Hanoi (137) plummeted thirty-seven places. Karachi (205) and Bishkek (207) remain the region’s least expensive cities for expatriates.
Australian cities have fallen in the ranking this year as the local currency has depreciated against the US dollar. Brisbane (84) and Perth (61) dropped thirteen and eleven spots, respectively, while Sydney (29), Australia’s most expensive ranked city for expatriates, experienced a relatively moderate drop of five places. Melbourne fell twelve spots to rank 58.
Cities in the United States have dropped in the ranking due to the depreciation of the US dollar against other major currencies worldwide. New York dropped four places to rank 13, the highest-ranked city in the region. San Francisco (28) and Los Angeles (35) dropped seven and twelve places, respectively, from last year while Chicago (51) dropped twenty places.
In South America, São Paolo (58) ranked as the costliest city despite a twenty-two place drop from last year. Followed by Santiago, Chile (69), Rio de Janeiro (99), Lima (132) and Bogota (168). Tegucigalpa (201) is the least expensive city in South America. Caracas in Venezuela has been excluded from the ranking due to the complex currency situation; its ranking would have varied greatly depending on the official exchange rate selected.
Most Canadian cities continued to drop in this year’s ranking mainly due to the weak Canadian dollar. The country’s highest-ranked city is Toronto (109) together with Vancouver (109), while Montreal (147) and Calgary (154).
Europe, the Middle East, and Africa
Overall, Western European cities have all risen in the rankings mainly due to the strengthening of local currencies against the US dollar and the cost of goods and services. Zurich (3) remains the most costly European city. In the United Kingdom, London jumped ten spots to rank 19 whilst Birmingham (128) rose nineteen places from last year.
Other cities that jumped in the ranking include Paris (34), up twenty-eight places from last year, Rome (46), up thirty-four spots, Madrid (64), up forty-seven, and Vienna (39) up thirty-nine spots. Meanwhile, a few cities in Eastern and Central Europe, including Moscow (17), St. Petersburg (49), and Kiev (173), dropped four, fourteen, and ten spots, respectively, as a result of local currencies losing value against the US dollar.
Tel Aviv (16) continues to be the most expensive city in the Middle East for expatriates. Despite dropping off the top spot on the global list, Luanda, Angola (6) remains the highest ranking city in Africa. Rising ten spots, Windhoek (196) in Namibia ranks as the least expensive city in the region and globally.
Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit www.mercer.com/col. To purchase copies of individual city reports, visit https://mobilityexchange.mercer.com/cost-of-living-rankings or call Mercer Client Services in Warsaw on +48 22 434 5383.
Notes for editors
The list of rankings is provided to journalists for reference and should not be published in full. The top 10 and bottom 10 cities may be reproduced in a table.
The figures for Mercer’s cost of living and rental accommodation costs comparisons are derived from a survey conducted in March 2018. Exchange rates from that time and Mercer’s international basket of goods and services from its Cost of Living survey have been used as base measurements.
Governments and major companies use data from this survey to protect the purchasing power of their employees when transferred abroad; rental accommodation costs data is used to assess local expatriate housing allowances. The choice of cities surveyed is based on the demand for data.
Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 23,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people. With nearly 65,000 colleagues and annual revenue over $14 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. Marsh & McLennan Companies is also the parent company of Marsh,which advises individual and commercial clients of all sizes on insurance broking and innovative risk management solutions;Guy Carpenter, which develops advanced risk, reinsurance and capital strategies that help clients grow profitably and pursue emerging opportunities; and Oliver Wyman, which serves as a critical strategic, economic and brand advisor to private sector and governmental clients. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.