Tracking WCOL's impact on your mobility program!

We all know the cost of living has gone up in most places. Here's another measure of that. This year EIU’s latest Worldwide Cost of Living (WCOL) survey shows that prices have risen by an average of 8.1% in local-currency terms over the past year in the world’s biggest cities - the fastest rate in the last 20 years! This year’s survey was conducted between August 16th and September 16th 2022. 

Per CNN:

"The war in Ukraine, Western sanctions on Russia and China's zero-Covid policies have caused supply-chain problems that, combined with rising interest rates and exchange-rate shifts, have resulted in a cost-of-living crisis across the world," Upasana Dutt, head of worldwide cost of living at EIU, said in a media statement. She added: "We can clearly see the impact in this year's index, with the average price rise across the 172 cities in our survey being the strongest we've seen in the 20 years for which we have digital data. The rise in petrol prices in cities was particularly strong (as it was last year), but food, utilities and household goods are all getting more expensive for city-dwellers." 

The WCOL survey reveals that for the first time, New York City tied Singapore for the top spot as the most expensive city in the world. The top 10 most expensive cities this year:

• 1st (tied): NYC and Singapore (this is Singapore's 8th time in last 10 years)
• 3rd: Tel Aviv (last year's #1)
• 4th (tied): Hong Kong and Los Angeles
• 6th: Zurich
• 7th: Geneva
• 8th: San Francisco
• 9th: Paris
• 10th (tied): Copenhagen and Sydney

Some additional insights from the research:

The biggest upward movers are the Russian cities of Moscow and St Petersburg, which have shot up the rankings by 88 and 70 places respectively in large part due to Western sanctions. Then due to the rising strength of the U.S. dollar, a number of U.S. cities saw dramatic increases, notably Atlanta, Charlotte, Indianapolis, San Diego, Portland and Boston all making some of the biggest moves upward in the rankings. Of the top ten biggest drops in rankings, European cities such as Luxembourg and Stockholm accounted for five. Lyon, Osaka, Manchester, Brussels and Tokyo all dropped in this year's list.

The EIU evaluates more than 400 individual prices across more than 200 products and services in 172 cities in order to produce the list. Inflation is widely spread with the biggest rise in cities. The impact of inflation is most noticeable in (132%), Istanbul (86%), Buenos Aires (64%), and Tehran (57%). Gas, energy, food, and household goods prices have been primary drivers of the increase globally. 

However, the report concludes with a bit of optimism as we head into 2023, by suggesting that prices are set to ease as interest rates rise and the global economy slows. They note (as we have in previous posts) that supply chain challenges, particularly on freight shipping, have started coming down. They also expect commodity prices for energy, food and metals to fall sharply in the next year. Overall, EIU forecasts that global consumer price inflation will fall from an average of 9.4% this year to a still-high 6.5% in 2023. 

For mobility programs, this information is helpful and emphasizes the need to get fresh assessments and cost projections for global assignments and relocations. For now, travel costs, household goods shipments, rents, and cost of living allowances continue to dramatically impact the cost of talent transfers.