Europe becomes an expensive place to locate

Companies may have to adjust their compensation packages for overseas staff in the light of big changes in the comparative cost of living and working in major global cities, a new survey shows.

by Mercer Human Resource Consulting
Last Updated: 23 Jul 2013

According to Mercer HUman Resource Consulting's annual worldwide cost of living survey, major US cities are becoming cheaper places to live and work in, as the euro, pound and rouble rise against the US dollar.

The top ten in a survey of 143 cities across six continents is dominated by north Asia and Europe, with Moscow the most expensive for the second year running, followed by London, Seoul, Tokyo and Hong Kong. London has leapt from fifth place to second in one year.

As the US dollar continues to decline against other major currencies, the most expensive US city, New York, has fallen five places from 10th to 15th most expensive in 2007, sandwiched between Singapore (14) and Dublin (16).

In London steep rises in rental costs together with the strengthening of the pound against the US dollar contributed to London's jump to second place, according to Mercer's research manager Yvonne Traber.

Less expensive European cities included Rome (18), Stockholm (23), Amsterdam (25), Madrid (26), Barcelona (31), Munich (39), Brussels (44) and Berlin (45). The cheapest European city was the Bulgarian capital, Sofia, at 108 in the ranking.

Beijing fell from 14th place to 20th, while Mumbai rose from 68th to 52nd, one place behind Miami. Los Angeles fell from 29th place to 42nd and San Francisco from 34th to 54th.

Rebecca Powers, a principal consultant at Mercer, said the big changes since last year were mostly due to exchange rate fluctuations, particularly a weakening dollar and strengthening euro.

She added: "As companies continue to send their employees on expatriate assignments, they must closely monitor changes in cost of living to ensure their expatriate packages are fair and competitive."

Mercer Cost of Living Ranking 2007 (2006 in brackets)
1 (1) Moscow
2 (5) London
3 (2) Seoul
4 (4) Tokyo
5 (4) Hong Kong
6 (8) Copenhagen
7 (7) Geneva
8 (6) Osaka
9 (9) Zurich
10 (10) Oslo

Source:
Worldwide Cost of Living Survey
Mercer Human Resource Consulting
Review by Joe Gill

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