City Mayors: European growth cities (original) (raw)

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German and Nordic cities perform

well in European economic report By Brian Baker, Senior Correspondent

25 October 2009: Munich has supplanted London from top place in the annual European Regional Economic Growth Index (E-REGI). It is the first time a German city heads this ranking. The effect of the financial markets and banking sector travails have not affected London’s high rating in most measures of city performance but it has caused a significant slide in the E-REGI from first in 2008 to eighth in 2009.

The E-REGI index, published each year by Lasalle Investment Management, is based on economic growth, wealth and business operating environment and uses weighted scoring of fifteen variables to produce a quantitative and topical assessment for potential investors. It has been designed to indicate the best city regions for investment in real estate products in the short to medium term.

It gives higher value to growth measures than to business operating environment and wealth measures. However, in 2009, the wealth measures are helping some cities to contain the impact of the economic vicissitudes.

LaSalle Investment Management Head of European Research and Strategy Robin Goodchild said: “ We have seen more change in the positions in the index this year than in any previous year since the E-REGI was launched. Underlying wealth has been a big factor this year with affluent locations such as the Swiss and Nordic cities, who have strong fundamentals to help to protect local economies from the effect of slowing growth, doing well.”

The top European cities for economic growth

Research by LaSalle Investment Management

Nordic cities are prominent in the top ten. In the 2009 rankings Stockholm is 3rd, Oslo is 4th , Helsinki is 7th and Gothenburg is 10th. All are up on 2008 with Gothenburg reaching the top ten for the first time. It was 14th in 2008. .

Third place is Stockholm’s highest ranking since 2000. Its success, and that of Gothenburg, comes in spite of projected falls in GDP in Sweden in 2009. The authors surmise that Sweden’s friendly attitude towards private equity companies may turn in to a competitive advantage for its major city regions, notably Stockholm. 45 per cent of Swedish companies employing more than 250 people are based in the Stockholm city region.

Munich’s rise to the top of the charts is attributed to a combination of the high levels of wealth across the Bavarian region and to economic growth forecasts which reflect the highly diversified local business structure in the city region. In 2008 Munich placed third.

The report authors say that Munich is attractive for investment in real estate products in the present period because it has a growing SME ( small and medium sized enterprises) sector and extensive research and development activities. In combination this results in comparatively strong economic and employment growth forecasts despite the slowdown.

Although German cities are affected by poor short-term economic performance nationally almost 50 per cent of them moved upwards in the 2009 index and it is the only country with four cities in the top twenty.

Stuttgart remains the second most attractive investment location and rises three places to ninth this year helped by high wealth levels and a strong commitment to research and development. Mannheim-Karlsruhe placed 15th and Frankfurt 20th.

Paris retains second place and has a score only marginally behind Munich. Report authors attribute this ranking to a combination of high wealth levels and sustained growth prospects related to the centralised structures in France which draws most larger businesses to establish a presence in it and to sustained high public sector demand for office space.

Luxembourg City completes the top five. Up three places on the 2008 report its high wealth level protects it under this index methodology from the effects of lower growth forecasts. However, the report warns that the city may struggle to retain its place in future years if more stringent EU rules deter its attractiveness to the financial services industry.

France is expected to outperform the Euro-zone economic growth average in 2009 and to equal it in 2010 and this is a factor in most French cities achieving improved scores and rankings this year. However, the problems at EADS and the downturn in orders for Airbus family of airplanes prompted a fall for Toulouse which slid six places to 22nd.

Bordeaux, Strasbourg, Rouen/Le Havre and Lille all rose significantly but Basel/Mulhouse, which ranks higher than all those, slipped a place to 28th.

The Swiss cities all rose in the E-REGI rankings in 2009. Lasalle Investment Management say this is due to their high levels of wealth which help them to be less affected by the slowing economic growth rates. Geneva rose 12 places to 25th and Zurich, placed 12th this year, was up 10 places. Bern rose 24 places to 14th..

By contrast, it is the first year since 2001 that no Spanish city has been in the top twenty in the E-REGI index. The authors say that the significant down-turn which has occurred in the last 18 months as a consequence in part of the former over-heating in Spanish economy is a major factor and also cite an allegedly uncompetitive and inflexible labour market.

Madrid replaces Barcelona as the highest placed Spanish city in the index even though it slid 23 places to 44th. Barcelona dropped 51 places to 68th. Zaragoza was the only Spanish city to rise in the E-REGI in 2009. It was up 9 places to 69th.

Although Moscow is included in the index for the first time in sixth place most of the Central and Eastern European cities fell significantly in the index in 2009. Report authors say this reflects the negative economic growth rates in the region and the continuing slide in volumes of commercial real estate volumes. Most of them are in the bottom third of the index this year.

Warsaw remains the highest placed city region in the CEE area though it fell from 10th in 2008 to 17th place. All the Polish cities except Szezecin, which rose one place, deteriorated markedly in 2009.

The exceptions to the trend in the area are Bratislava, where tax reforms contributed to a rise of three places to 50th and Ljubljana which gained 19th places to 46th helped by Government investment in research and development.

The Index is based on 15 factors, which are weighted. It has been compiled annually since 1998. This year it takes account of data from 288 regions across 31 countries in Europe.

THE LARGEST CITIES IN THE WORLD AND THEIR MAYORS 2010
Introduction
Cities by size: 1 to 150 | 151 to 300 | 301 to 450 | 451 to 550 |
Cities in alphabetical order: A to D | E to L | M to R | S to Z |
Cities by countries: A to D | E to L | M to R | S to Z |