November 2019
Global Cities Outlook Growth will slow in 2020-21 in nearly two-thirds of the world’s cities Economist Stephen Adams Senior Economist +44(0)20 3910 8084
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We forecast that of the world’s 900 major cities, 586 will experience slower
annual growth in 2020-21 than in the previous five years. The current slowdown in global trade is hurting many manufacturing-intensive cities, while others are affected by weaker growth in demand for traded services.
Among those set to show the most marked slowdowns is San Jose (Silicon Valley). In North America, cities on the west coast and in the south have generally been setting the pace in recent years, but in the next two years we forecast that they will outperform other large cities by much smaller margins than in the past.
In Europe, eastern cities will continue to set the pace. London, having seen its growth This is a free extract of the full research note available for subscribers of our Global Cities service.
fall sharply, should see a modest improvement in the next two years, performing broadly in line with other major cities, where once it easily out-performed.
Chinese cities are slowing while Indian cities are booming. Other strong performers in the next two years include Ho Chi Minh City and Phnom Penh, while Japanese cities will continue to grow very slowly.
Problems (largely but not only political) will continue to dog several Latin American For those who are not subscribers to the service, please click here to request a free trial and to
cities, with Caracas clearly the major LatAm city in greatest distress. Many Middle Eastern and African cities are challenged by their reliance on commodity markets, not-least oil, and are seeing only slow growth.
Looking further ahead, by 2035 Asian cities will in aggregate have overtaken North
American and European cities. Four Chinese cities will have entered the top-ten, but New York, Tokyo, Los Angeles and London will remain the world’s largest by GDP.
find out more. Global cities GDP growth, 2020-2035. Size of city in 2035 shown by size of circle.
Chart 1 Emerging economy cities see rapid growth to 2035, but few break into the top level in terms of scale of GDP.
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Contact: Stephen Adams | sadams@oxfordeconomics.com
November 2019
Growth will slow in 2020-21 in nearly two-thirds of the world’s cities
The global slowdown is apparent in two-thirds of the world’s top cities The current slowdown in the global economy is impacting on the world’s major cities. Of the top 900 we expect that just under two-thirds, 586, will experience slower growth in 2020-21 than in the past five years. Our forecasts show that 76 of the top 98 North American cities will see slower GDP growth in 2020-21 than in 2015-19, 156 of the top 232 European cities will do so, and no less than 146 of the 150 mainland Chinese cities (although, see below), plus 122 of the 185 non-Chinese Asian cities.1 In Latin America the figure is 41 of 104 cities, while in the Middle East and Africa it is 45 out of 131 cities. This is represented in Chart 2 by those cities being located below the dotted diagonal line.
Chart 2
Average annual GDP growth, Global Cities, history v forecast GDP 2020-21, average annual growth, %
We forecast that nearly two-thirds of global cities will slow over the next two years.
12 10
Asia China Europe North America Latin America Africa and Middle East
8 6 4 2 0
-6
-4
-2
0 -2
2
4
6
8
10
12
GDP 2015-19, average annual growth, %
-4 Source: Oxford Economics, national and international statistic agencies
But in the long term, will Asian cities conquer all? Looking over the next 15 years, we expect the outperformance of Asian cities, on aggregate, to continue, such that by 2035, their total GDP will overtake that of European and North American cities combined. A large part of this will be down to the growth of Chinese cities, which although slower than in the past, will still be strong enough to mean that their combined GDP will alone overtake that of North American cities by 2035.
1
Geographical definitions: Asia excludes the Middle East but includes Australia and New Zealand; Mexico and the Caribbean are included in Latin America; Europe includes Turkey and Russia. Page 2
Contact: Stephen Adams | sadams@oxfordeconomics.com
November 2019
Growth will slow in 2020-21 in nearly two-thirds of the world’s cities
Chart 3 Asian cities will collectively outweigh western cities within a decade and a half. Others will be left behind.
Global cities GDP profile, 2001-2035 US$ trns, constant 2015 prices 45 Asian cities 40 European and North American Cities Africa, Middle Eastern & Latin America Cities 35 30 25 20
15 10 5 0 2005
2010
2015
2020
2025
2030
2035
Source: Oxford Economics
We forecast that of the 10 largest cities in the world today, six will still be in the top 10 by GDP in 2035. The top four of New York, Tokyo, Los Angeles, and London, will all retain their places. The new entrants will be four Chinese cities, all of which are currently in the top 20; Shanghai, Beijing, Guangzhou and Shenzhen. Those that will slip out of the top 10 by 2035 will be Osaka, San Francisco, Dallas and Washington—although all will stay within the top 16.
GDP level in 2035, growth during 2020-2035 and global ranking Top 10 largest cities by GDP, 2035
Table 1 By 2035, four Chinese cities will enter the top 10 largest cities in the world by GDP.
Rank 2019
Rank 2035
City
GDP 2035 ($ bns, constant 2015 prices)
Growth (%y/y, 2020-35)
1
1
New York
2,392
1.9
2
2
Tokyo
1,731
0.6
3
3
Los Angeles
1,494
2.0
4
4
London
1,232
2.0
11
5
Shanghai
1,087
4.8
13
6
Beijing
985
4.7
5
7
Paris
975
1.3
6
8
Chicago
885
1.6
19
9
Guangzhou
845
5.1
20
10
Shenzhen
831
5.1
Source: Oxford Economics
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Contact: Stephen Adams | sadams@oxfordeconomics.com
March 2018
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Š Oxford Economics 2019: all rights reserved
Š Oxford Economics 2019 - all rights reserved.
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Contact: Stephen Adams | sadams@oxfordeconomics.com