INTERNATIONAL REWARD
EIU cost of living survey 2009
The strong dollar has made US cities expensive places to live, according to the Economist Intelligence Unit's cost of living survey.
The findings highlights the way in which shifts in exchange rates in recent months have altered the relative cost of living in cities around the world. By comparing the ranking of cities in September 2008 (when the price survey was conducted) to the ranking in February 2009 (adjusting for recent exchange-rate movements), it is possible to see which locations have been winners or losers as a result of the currency dislocation.
The survey compares prices and products in 140 cities around the world. Its purpose is to provide companies with an unbiased and independent guide from which allowances can be calculated for executives and their families being sent overseas.
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Weakening exchange rates have driven a substantial downward movement in the relative cost of living across much of Western Europe, including the UK:
London, originally ranked eighth, has slid dramatically in line with a weak sterling to joint 27th position, below New York for the first time since 2002.
Oslo saw its relative cost of living fall by 28 index points and Stockholm by 24 points.
Reykjavik, hit by a collapse in the Icelandic krone, experienced a fall of 23 points.
Despite these improvements in the cost of living, Western Europe still remains the most expensive region in the world, with an average cost of living rate similar to that of New York. Seven of the top ten cities surveyed are from Western Europe and all but two of the West European cities surveyed are in the top 50. The cities that can claim the enviable (or unenviable) title of cheapest in Western Europe are Reykjavik, ranked 67th, and Manchester, ranked 70th.
A final word
"Two factors drive the relative cost of living: local prices and exchange rates. Normally our ranking of cities by cost of living is relatively stable, but in the current global climate changes in exchange rates have significantly altered our assessment of the most and least expensive cities." - Jon Copestake, editor of the EIU report.
Want to know more
Title: Worldwide Cost of Living 2009, Economist Intelligence Unit.
Survey details: This bi-annual survey compares the original findings of the September 2008 cost of living survey to those at February 2009 exchange rates. For the purposes of this release it is assumed that local prices have not moved between September, when the survey took place, and February when the new exchange rates were applied.
Availability: Available from the Economist Intelligence Unit in London, tel: 0207 576 8181, or email: london@eiu.com or online via wcol.eiu.com.
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist: “As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies”. Find out more at www.eiu.com.