Canada , Toronto

• Luanda in Angola is the world’s most expensive city for expatriates; Karachi is the cheapest
• Top 10 ranked cities dominated by Africa, Asia and Europe
• London drops 1 place to rank 18; Singapore and São Paolo join the top 10 list

London, embargoed from publication until 00.01 hrs (BST) Tuesday 12 July 2011 Luanda in Angola is the world’s most expensive city for expatriates for the second year running, according to Mercer’s 2011 Cost of Living Survey. Tokyo remains in second position and N’Djamena in Chad in third place. Moscow follows in fourth position with Geneva in fifth and Osaka in sixth. Zurich jumps one position to rank seventh, while Hong Kong drops down to ninth.

New entries in the top 10 list of the costliest cities in the world are Singapore (8), up from 11, and São Paolo (10), which has jumped 11 places since the 2010 ranking. Karachi (214) is ranked as the world’s least expensive city, and the survey found that Luanda, in top place, is more than three times as costly as Karachi. Recent world events, including natural disasters and political upheavals, have impacted the rankings for many regions through currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices.

Down one place from last year, London(18) is the UK’s most expensive city, followed by Aberdeen (144), Glasgow (148) and Birmingham (150). Belfast (178) is ranked as the UK’s least expensive city.

The survey covers 214 cities across five continents and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment. Is is the world’s most comprehensive cost of living survey and is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city and all cities are compared against New York. Currency movements are measured against the US dollar. The cost of housing – often the biggest expense for expatriates – plays an important part in determining where cities are ranked.

Nathalie Constantin-Métral, Senior Researcher at Mercer responsible for compiling the ranking each year, commented: “Multinational companies have long understood the competitive advantage of a globally mobile workforce, though the enduring challenge is to balance the cost of their expatriate programs. Currency fluctuations, inflation, political instability and natural disasters are all factors which influence the cost of living for expats. It is essential that employers understand their impact, for cost-containment purposes but also to ensure they retain talented employees by offering competitive compensation packages.

“During the period of data-collection for this year’s survey the world witnessed an incredible number of natural disasters and political upheavals that have all affected the lives of expatriate employees to some extent. Currency fluctuations and the impact of inflation on goods and services – gas in particular – have led to some reorganization of the ranking,” said Ms Constantin-Métral. “Overall, the cost of living in cities across Europe has remained relatively stable, while in Africa the picture is patchy with the limited availability of accommodation leading to increased living costs in some key cities.

“In North America increasing gas prices continue to contribute to rising consumer prices, but many of its cities dropped in the rankings, as price increases in other regions have been more severe pushing US cities down the list. Australian cities have witnessed dramatic rises in the ranking as the Australian dollar has strengthened against the US dollar.”

Europe, the Middle East and Africa

Only three European cities remain in the top 10 list of most expensive cities. Moscow (4) is still the most costly European city on the list, followed by Geneva (5) and Zurich (7). Oslo (15) is down four places from last year, whereas Bern (16) has jumped six and Copenhagen dropped seven places from 10 to 17. London (18) is followed by Milan (25) and Paris (27) – both down 10 places from last year. St. Petersburg ranks 29, followed by Rome (34) and Vienna (36). Up from 76in 2010, Stockholm (39) has seen one of the most dramatic changes in the region – mainly due to a considerable strengthening of the local currency against the US dollar.

Ms Constantin-Métral commented: “In most Western European cities, the cost of living for expatriates has remained relatively stable over the last 12 months. However, many of the region’s cities have still dropped in the ranking. In large part, this is because all cities are compared to New York and price increases there have been more significant than in most European cities. Some reduction in accommodation costs, due to the economic downturn, has also been behind changes in rankings for select European cities – most notably Athens and Barcelona.”

Ranking 24, Tel Aviv is down five places from 2010 but continues to be the most expensive city in the Middle East. Abu Dhabi (67), Dubai (81) and Amman (103) follow having dropped 17, 26 and 20 places in the ranking, respectively. “The trend of falling accommodation costs continues across the Middle East region, driving the cities down the ranking along with the cost of living for expats. Dubai in particular is witnessing a drastic reduction in accommodation costs as the supply of property keeps flooding the rental market,” said Ms Constantin-Métral.

Luanda (1) remains the most expensive city for expatriates across Africa and globally, and N’Djamena follows in third place. Libreville (12) has slipped five places since last year. Niamey remains at 23 whereas Victoria (25) in the Seychelles dropped 12 places as the Seychelles rupee has weakened against the US dollar. In South Africa, Johannesburg (131) and Cape Town (158) have leapt 20 and 13 places in the ranking respectively, reflecting the strengthening of the South African rand. The least expensive cities in the region are Tunis (207) and Addis Ababa (211).

Ms Constantin-Métral commented:“Finding good and secure accommodation for expatriate employees is a real challenge in most of the African cities on the list and costs can be significant compared to other regions. Accommodation prices are currently at record levels in cities like Luanda and this is generally the main reason why we find so many African cities high up in the ranking.”

The Americas

Up 11 and 17 places in the ranking respectively, São Paolo (10) and Rio de Janeiro (12) are now the most expensive locations for expatriates in both North and South America. In South America, Brasilia (33) is the third most expensive city, up 37 places since last year’s ranking. High inflation on goods and services means Caracas in Venezuela has also shot up in the rankings, to rank 51 from 100 in 2010. Bolivia’s La Paz (212) and Nicaragua’s Managua (213) were the least expensive cities in South America.

“Inflation pressures continue to be the main impact on the cost of goods and services in Argentina and Venezuela, causing their cities to jump in the ranking. Overall, exchange rates in South America remain relatively stable, with the exception of local currencies in Brazil, Chile and Costa Rica which have all strengthened significantly against the US dollar, causing the region’s cities to rise in the ranking.” according to Ms Constantin-Métral.

At rank 32, New York is the most expensive city in the United States. Los Angeles (77) and Chicago (108) have dropped significantly in the rankings (22 and 17 places respectively) as price increases on goods and services have been moderate compared to New York. Washington, however, also at ranking 108, has climbed three places, as rental accommodation prices have increased significantly. Ms Constantin-Métral said: “Generally speaking rental prices increased slightly in most US cities as the economy is recovering and demand for housing is catching up.” Portland (186) and Winston-Salem (197) are the least expensive ranked cities in the United States.

Up 17 places, Toronto (59) has overtaken Vancouver (65) to become the most expensive Canadian city in the ranking, followed by Montreal (79) and Calgary (96). Toronto has overtaken Vancouver in the rankings due to relatively high rental accommodation costs in Toronto. Ottawa (114) is the least expensive city in the Canadian rankings. Overall, Canadian cities have risen in the rankings due to the strength of the Canadian dollar relative to the US dollar.

AsiaPacific

Australian cities have witnessed some of the most dramatic jumps in the ranking as the local currency has gained almost 14% against the US dollar. Sydney (14) is up ten places, Melbourne has moved from rank 33 to 21 and Perth has surged 30 places to reach rank 30. Up 44 places, Adelaide (46) is the country’s highest riser. Ms Constantin-Métral said: “In addition to the strengthening of the currency, a dramatic increase in rental prices has also pushed Australian cities up the ranking, especially in Adelaide, where market supply is extremely low.”

The most expensive city in Asia is Tokyo (2), followed by Osaka (6). Singapore (8) has joined the list of the world’s top 10 most expensive cities and is followed by Hong Kong (9). Nagoya (11) in Japan is up eight places whereas Seoul (19) is down five. Other highly ranked Asian cities are Beijing (20), Shanghai (21), Guangzhou (38), Shenzhen (43) and Taipei (52). Ms Constantin-Métral commented: “Most Asian cities have moved up in the ranking as availability for expatriate accommodation prices is limited and demand is high.”

New Delhi (85) is India’s most expensive city followed by Mumbai (95) and Bangalore (180). Elsewhere in Asia, Jakarta ranks 69, Hanoi 136, Bangkok 88 and Kuala Lumpur 104. Karachi (214) is the region’s least expensive city.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For further information, or to purchase copies of the individual city reports, visit www.mercer.com/costofliving or call Client Services, Warsaw on +48 22 434 5383.

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Notes for Editors

Important: The list of rankings is provided to journalists for reference, and should not be published in full. The top 10 and bottom 10 cities in either list 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 2011. March 2011 exchange rates and Mercer’s international basket of goods and services have been used as basis measurements.

The information is used by governments and major companies 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 leading global provider of consulting, outsourcing and investment services. Mercer works with clients to solve their most complex benefit and human capital issues, designing and helping manage health, retirement and other benefits. It is a leader in benefit outsourcing. Mercer’s investment services include investment consulting and multi-manager investment management. Mercer’s 20,000 employees are based in more than 40 countries. The company is a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York and Chicago stock exchanges. For more information, visit www.mercer.ca.

Mercer is also a premier provider of 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 world-wide cost of living, housing and hardship allowances. Its annual global mobility forums provide companies with the latest trends and research on mobility issues.

Mercer Cost of Living Survey – Worldwide Rankings 2011

(The Mercer international basket including rental accommodation costs)

(For Abidjan, Tripoli and Manama, only accommodation prices were collected for the March 2011 survey; remaining costs were taken from the September 2010 survey.)