MMC Marsh and McLennan Companies Inc

Hong Kong leads as Kinshasa makes big jump up the ranking ladder in Mercer’s 22nd annual Cost of Living Survey

Despite volatile global markets and growing security issues, organizations continue to leverage global expansion strategies to remain competitive and to grow. Yet, few organizations are prepared for the challenges world events have on their business, including the impact on cost of expatriate packages. Mercer’s 22nd annual Cost of Living Survey finds that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices, contribute to the cost of expatriate packages for employees on international assignments.

“Despite technology advances and the rise of a globally connected workforce, deploying expatriate employees remains an increasingly important aspect of a competitive multinational company’s business strategy,” said Ilya Bonic, Senior Partner and President of Mercer’s Talent business. “However, with volatile markets and stunted economic growth in many parts of the world, a keen eye on cost efficiency is essential, including a focus on expatriate remuneration packages. As organizations’ appetite to rapidly grow and scale globally continues, it is necessary to have accurate and transparent data to compensate fairly for all types of assignments, including short-term and local plus status.”

According to Mercer’s 2016 Cost of Living Survey, Hong Kong tops the list of most expensive cities for expatriates, pushing Luanda, Angola to second position. Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo is in fifth, up six places from last year. Kinshasa, ranked sixth, appears for the first time in the top 10, moving up from thirteenth place.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Geneva (8), N’Djamena (9), and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Windhoek (209), Cape Town (208), and Bishkek (207).

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.

“Maximizing return on investment with fewer resources and talent shortages worldwide makes growth initiatives more difficult for multinationals,” said Mr. Bonic. “Organizations must ensure they can facilitate the moves they need to drive business results by offering fair and competitive compensation packages.”

Mr. Bonic added that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller. Low levels of inflation have translated into fairly steady cost increases around the world.

The Americas

Cities in the United States have climbed in the ranking due to the strength of the US dollar against other major currencies, in addition to the significant drop of cities in other regions which resulted in US cities being pushed up the list. New York is up five places to rank 11, the highest-ranked city in the region. San Francisco (26) and Los Angeles (27) climbed eleven and nine places, respectively, from last year while Seattle (83) jumped twenty-three places. Among other major US cities, Honolulu (37) is up fifteen places, Washington, DC (38) is up twelve places, and Boston (47) is up seventeen spots. Portland (117) and Winston Salem, North Carolina (147) remain the least expensive US cities surveyed for expatriates.

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Despite mild price increases overall, most cities in the US have climbed in the ranking, primarily due to a strong US dollar.”

In South America, Buenos Aires (41) ranked as the costliest city despite a twenty-two place drop from last year. San Juan, Puerto Rico (67) follows as the second most expensive location in the region, climbing twenty-two spots. The majority of other cities in South America fell as a result of weakening currencies against the US dollar despite price increases on goods and services in countries, such as Brazil, Argentina, or Uruguay. In particular, São Paolo (128) and Rio de Janeiro (156) plummeted eighty-eight and eighty-nine places, respectively, despite a strong increase for goods and services. Lima (141) dropped nineteen places while Bogota (190) fell forty-two places. Managua (192) 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.

Canadian cities continued to drop in this year’s ranking mainly due to the weak Canadian dollar. The country’s highest-ranked city, Vancouver (142), fell twenty-three places. Toronto (143) dropped seventeen spots, while Montreal (155) and Calgary (162) fell fifteen and sixteen spots, respectively.

Europe, the Middle East, and Africa

Two European cities are among the top 10 list of most expensive cities. At number three in the global ranking, Zurich remains the most costly European city, followed by Geneva (8), down three spots from last year. The next European city in the ranking, Bern (13), is down four places from last year following the weakening of the Swiss franc against the US dollar.

Several cities across Europe remained relatively steady due to the stability of the euro against the US dollar. Paris (44), Milan (50), Vienna (54), and Rome (58) are relatively unchanged compared to last year, while Copenhagen (24) and St. Petersburg (152) stayed in the same place.

Other cities, including Oslo (59) and Moscow (67), plummeted twenty-one and seventeen places, respectively, as a result of local currencies losing significant value against the US dollar. London (17) and Birmingham, UK (96) dropped five and sixteen places, respectively, while the German cities of Munich (77), Frankfurt (88), and Dusseldorf (107) climbed in the ranking.

“Despite some marked price increases across the region, several local currencies in Europe have weakened against the US dollar which pushed a few cities down in the ranking,” explained Ms. Constantin-Métral. “Additionally, other factors like recent security issues, social unrest, and concern about the economic outlook have impacted the region.”

A few cities in Eastern and Central Europe climbed in the ranking as well, including Kiev (176) and Tirana (186) rising eight and twelve spots, respectively.

Tel Aviv (19) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (21), Abu Dhabi (25), and Beirut (50). Jeddah (121) remains the least expensive city in the region despite rising thirty places. “Several cities in the Middle East experienced a jump in the ranking, as they are being pushed up by other locations’ decline, as well as the strong increase for expatriate rental accommodation costs, particularly in Abu Dhabi and Jeddah,” said Ms. Constantin-Métral.

Despite dropping off the top spot on the global list, Luanda, Angola (2) remains the highest ranking city in Africa. Kinshasa (6) follows, rising seven places since 2015. Moving up one spot, N’Djamena (9) is the next African city on the list, followed by Lagos, Nigeria (13) which is up seven places. Dropping three spots, Windhoek (209) in Namibia ranks as the least expensive city in the region and globally.

Asia Pacific

This year, Hong Kong (1) emerged as the most expensive city for expatriates both in Asia and globally as a consequence of Luanda’s drop in the ranking due to the weakening of its local currency. Singapore (4) remained steady while Tokyo (5) climbed six places. Shanghai (7) and Beijing (10) follow. Shenzhen (12) is up two places while Seoul (15) and Guangzhou, China (18) dropped seven and three spots, respectively.

“The strengthening of the Japanese yen pushed Japanese cities up in the ranking,” said Ms. Constantin-Métral. “However, Chinese cities fell in the ranking due to the weakening of the Chinese yuan against the US dollar.”

Mumbai (82) is India’s most expensive city, followed by New Delhi (130) and Chennai (158). Kolkata (194) and Bangalore (180) are the least expensive Indian cities ranked. Elsewhere in Asia, Bangkok (74), Kuala Lumpur (151) and Hanoi (106) plummeted twenty-nine, thirty-eight, and twenty places, respectively. Baku (172) had the most drastic fall in the ranking, plummeting more than one hundred places. The city of Ashkhabad in Turkmenistan climbed sixty-one spots to rank 66 globally.

Australian cities have witnessed some of the most dramatic falls in the ranking this year as the local currency has depreciated against the US dollar. Brisbane (96) and Canberra (98) dropped thirty and thirty-three spots, respectively, while Sydney (42), Australia’s most expensive ranked city for expatriates, experienced a relatively moderate drop of eleven places. Melbourne fell twenty-four spots to rank 71.

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://www.imercer.com/products/cost-of-living.aspx 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 2016. 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.

About Mercer

Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and careers of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With annual revenue of $13 billion and 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.

Mercer also provides advice and market data on international and expatriate compensation management, and works with multinational companies and governments worldwide. It maintains one of the most comprehensive databases on international assignment policies; compensation practices; and data on worldwide cost of living, housing, and hardship allowances. Its annual global mobility conferences and other events provide companies with the latest trends and research on mobility issues. Visit https://www.imercer.com/EU/tabs/gm.aspx for details. Follow Mercer’s mobility news on Twitter @MercerMobility.

Mercer Cost of Living Survey – Worldwide Rankings 2016

(The Mercer international basket, including rental accommodation costs)

Rank as of March   City   Country 2015   2016     2   1   HONG KONG   Hong Kong 1   2   LUANDA   Angola 3   3   ZURICH   Switzerland 4   4   SINGAPORE   Singapore 11   5   TOKYO   Japan 13   6   KINSHASA   Dem. Rep. of the Congo 6   7   SHANGHAI   China 5   8   GENEVA   Switzerland 10   9   NDJAMENA   Chad 7   10   BEIJING   China 16   11   NEW YORK CITY   United States 14   12   SHENZHEN   China 9   13   BERN   Switzerland 20   13   LAGOS   Nigeria 8   15   SEOUL   South Korea 17   16   VICTORIA   Seychelles 12   17   LONDON   United Kingdom 15   18   GUANGZHOU   China 18   19   TEL AVIV   Israel 35   20   ABUJA   Nigeria 23   21   DUBAI   United Arab Emirates 32   22   OSAKA   Japan 42   23   BRAZZAVILLE   Congo 24   24   COPENHAGEN   Denmark 33   25   ABU DHABI   United Arab Emirates 37   26   SAN FRANCISCO   United States 36   27   LOS ANGELES   United States 30   28   LIBREVILLE   Gabon 26   29   NANJING   China 27   30   TIANJIN   China 21   31   SHENYANG   China 39   32   NOUMEA   New Caledonia 24   33   QINGDAO   China 29   34   CHENGDU   China 42   34   CHICAGO   United States 22   36   CONAKRY   Guinea 52   37   HONOLULU   United States 50   38   WASHINGTON   United States 28   39   YANGON   Myanmar 55   40   DJIBOUTI   Djibouti 19   41   BUENOS AIRES   Argentina 31   42   SYDNEY   Australia 41   43   TAIPEI   Taiwan 46   44   PARIS   France 56   45   MIAMI   United States 63   45   DHAKA   Bangladesh 49   47   DUBLIN   Ireland 62   47   ACCRA   Ghana 64   47   BOSTON   United States 44   50   BEIRUT   Lebanon 53   50   MILAN   Italy 54   50   AMMAN   Jordan 60   50   YAOUNDE   Cameroon 56   54   VIENNA   Austria 80   54   NAGOYA   Japan 58   56   ABIDJAN   Côte d'Ivoire 71   57   RIYADH   Saudi Arabia 59   58   ROME   Italy 38   59   OSLO   Norway 76   60   PORT OF SPAIN   Trinidad & Tobago 71   61   WHITE PLAINS   United States 77   62   DALLAS   United States     62   BANGUI   Central African Republic 67   64   HELSINKI   Finland 69   64   AMSTERDAM   Netherlands 127   66   ASHKHABAD   Turkmenistan 50   67   MOSCOW   Russia 89   67   SAN JUAN   Puerto Rico 48   69   PERTH   Australia 78   70   DOUALA   Cameroon 47   71   MELBOURNE   Australia 88   71   MORRISTOWN   United States 91   71   MANAMA   Bahrain 45   74   BANGKOK   Thailand 92   75   HOUSTON   United States 99   76   DOHA   Qatar 87   77   MUNICH   Germany 103   78   ATLANTA   United States 83   79   DAKAR   Senegal 75   80   MANILA   Philippines 104   81   PANAMA CITY   Panama 74   82   MUMBAI   India 106   83   SEATTLE   United States 106   84   STOCKHOLM   Sweden 82   85   ABERDEEN   United Kingdom 94   86   LUXEMBOURG   Luxembourg 102   86   BRUSSELS   Belgium 79   88   BANDAR SERI BEGAWAN   Brunei 90   88   HO CHI MINH CITY   Vietnam 98   88   FRANKFURT   Germany 115   91   MINNEAPOLIS   United States 120   91   CAIRO   Egypt 99   93   JAKARTA   Indonesia 110   94   SAN JOSE COSTA RICA   Costa Rica 117   94   MUSCAT   Oman 66   96   BRISBANE   Australia 80   96   BIRMINGHAM   United Kingdom 61   98   AUCKLAND   New Zealand 65   98   CANBERRA   Australia 106   100   BERLIN   Germany 99   101   ISTANBUL   Turkey 71   102   ADELAIDE   Australia 117   103   KUWAIT CITY   Kuwait 122   103   DETROIT   United States 115   105   MADRID   Spain 86   106   HANOI   Vietnam 114   107   DUSSELDORF   Germany 70   108   SANTIAGO   Chile 130   108   ST. LOUIS   United States 124   110   BARCELONA   Spain 133   110   CLEVELAND   United States 130   112   PITTSBURGH   United States 124   113   HAMBURG   Germany 111   114   RIGA   Latvia 120   115   BAMAKO   Mali 104   116   NAIROBI   Kenya 135   117   PORTLAND   United States 142   118   PHNOM PENH   Cambodia 83   119   MONTEVIDEO   Uruguay 109   119   GLASGOW   United Kingdom 151   121   JEDDAH   Saudi Arabia 111   122   POINTE A PITRE   Guadeloupe 83   123   WELLINGTON   New Zealand 133   124   COTONOU   Benin 142   124   PRAGUE   Czech Rep. 149   126   GUATEMALA CITY   Guatemala 154   127   QUITO   Ecuador 40   128   SAO PAULO   Brazil 139   129   STUTTGART   Germany 132   130   NEW DELHI   India 140   130   CASABLANCA   Morocco 144   132   LOME   Togo 147   132   LYON   France 127   134   BELFAST   United Kingdom 145   134   LISBON   Portugal 137   136   BRATISLAVA   Slovakia 136   137   ATHENS   Greece 162   137   TASHKENT   Uzbekistan 97   139   KIGALI   Rwanda 129   139   COLOMBO   Sri Lanka 122   141   LIMA   Peru 119   142   VANCOUVER   Canada 126   143   TORONTO   Canada 162   143   ADDIS ABABA   Ethiopia 96   145   PORT AU PRINCE   Haiti 153   146   OUAGADOUGOU   Burkina Faso 157   147   WINSTON SALEM   United States 165   148   SANTO DOMINGO   Dominican Rep. 155   149   NIAMEY   Niger 155   150   TALLINN   Estonia 113   151   KUALA LUMPUR   Malaysia 152   152   ST.PETERSBURG   Russia 160   152   KINGSTON   Jamaica 161   154   LJUBLJANA   Slovenia 140   155   MONTREAL   Canada 67   156   RIO DE JANEIRO   Brazil 168   157   HARARE   Zimbabwe 157   158   CHENNAI   India 167   159   ZAGREB   Croatia 169   160   NURNBERG   Germany 177   160   SAN SALVADOR   El Salvador 146   162   CALGARY   Canada 159   162   LIMASSOL   Cyprus 93   164   MAPUTO   Mozambique 170   165   BUDAPEST   Hungary 172   165   LEIPZIG   Germany 171   167   VILNIUS   Lithuania 175   168   RABAT   Morocco 137   169   MEXICO CITY   Mexico     170   HAVANA   Cuba 162   171   OTTAWA   Canada 33   172   BAKU   Azerbaijan 178   172   BUCHAREST   Romania 179   174   DAR ES SALAAM   Tanzania 174   175   PORT LOUIS   Mauritius 184   176   KIEV   Ukraine 175   177   WARSAW   Poland 173   178   NOUAKCHOTT   Mauritania 202   179   BANJUL   Gambia 183   180   BANGALORE   India 188   180   ISLAMABAD   Pakistan 187   182   SOFIA   Bulgaria 165   183   ASUNCION   Paraguay 195   184   LA PAZ   Bolivia 181   185   ALGIERS   Algeria 193   186   TIRANA   Albania 184   187   KAMPALA   Uganda 190   188   TEGUCIGALPA   Honduras 192   189   YEREVAN   Armenia 148   190   BOGOTA   Colombia 150   190   BRASILIA   Brazil 199   192   MANAGUA   Nicaragua 196   193   BELGRADE   Serbia 193   194   KOLKATA   India 196   195   SARAJEVO   Bosnia and Herzegovina 94   196   ALMATY   Kazakhstan 182   197   MONTERREY   Mexico 198   198   TBILISI   Georgia 203   199   SKOPJE   Macedonia 180   200   LUSAKA   Zambia 188   201   GABORONE   Botswana 205   201   KARACHI   Pakistan 204   203   TUNIS   Tunisia 200   204   MINSK   Belarus 191   205   JOHANNESBURG   South Africa 186   206   BLANTYRE   Malawi 207   207   BISHKEK   Kyrgyzstan 200   208   CAPE TOWN   South Africa 206   209   WINDHOEK   Namibia

Source: Mercer’s 2016 Cost of Living Survey

View source version on businesswire.com: http://www.businesswire.com/news/home/20160622005391/en/

MercerMiriam Siscovick, + 1 206-356-8549miriam.siscovick@mercer.com