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In 2020, there were five U.S. entries among the cities with the biggest consumer spending in the world. By 2040, this will have risen to six with the addition of Dallas, a release by World Data Lab shows. At the same time, the other regions in the top 10 have been diversifying, with Japan losing ground and China gaining some, the numbers show.
Beyond the top 10, the U.S. has seen another city rising in the ranking. Houston is projected to climb to rank 12 in 2040, up from rank 14 in 2000. Washington D.C., Phoenix and Seattle are also among the top 20. While America’s major metropolises are keeping their top spots, the ranking exemplifies the growing power of U.S. Sun Belt cities which have been attracting residents with favorable climate and lower cost of living.
This chart shows the cities with the highest consumer spending in the world, by year.
Based on a relatively strong economy, consumer spending in the United States has persisted even through recent crises like the Covid-19 pandemic and strong inflation. Americans tend to save less and are among the biggest users of credit worldwide, which might not be sustainable but still ups spending. Additionally, richer Americans can still benefit from their pandemic savings and locked-in ultra-low mortgage rates. U.S. consumer spending is relying more and more on these rich or very rich individuals, the Wall Street Journal reports, which the U.S. has a lot of.
The report analyzes more than 6,000 cities on all continents. It found that 83% of new consumer spending until 2040 will be urban in nature. While the top 100 highest-spending cities are expected to grow in consumer class population by 2.4% annually until that date, consumer spending in them will grow by 4.5% every year, outperforming other urban populations around the globe as large cities continue to attract wealthy individuals and function as spending hubs.
Major Growth In Asia-Pacific Region
The Asia-Pacific region is expected to add the most cities above 300,000 in population to the ranking until 2040—361, or two thirds of the total worldwide growth. The makers of the report estimate that Guangzhou in China’s South will be the city home to the biggest number of APAC consumers by 2040, 45 million. Guangzhou was listed as the city with the 10th highest spending power in 2020, increasing to rank 4 by 2040 at $793 billion in annual consumer spend. This is still far behind the projected 2040 figures for U.S. cities New York ($2.1 trillion) and Los Angeles ($1.8 trillion).
Beijing and Shanghai are in ranks 15 and 16 in 2040, up from ranks 19 and 20 in 2020. Jakarta in Indonesia is expected to enter at a global rank 18 in 2040, having grown by that time to the second-biggest city in APAC by consumer class residents at 37 million.
Meanwhile, Japan will reduce the number of cities in the top 10 of the biggest spenders from three to one. The country has been struggling with low growth and investment as well as periods of deflation that have been a constant since the deep economic crisis of its asset bubble burst in 1992. Only Tokio is expected to remain, albeit in rank 3, while Osaka/Kyoto is expected to fall as far as rank 13 by 2040, down from formerly rank 3.
Charted by Statista