London regains second place in Global Cities ranking as Manchester stays in top 30

London and Manchester have retained the top 30 places in a hotly contested global city ranking, with the British capital rising to second place.

The closely watched Schroders Global Cities Index 2024 lifted London from third to second place behind US powerhouse San Francisco, and ahead of San Jose and Hong Kong in third and fourth place respectively.

Schroders highlighted London’s “economic performance and its innovation ecosystem” as drivers of its 8.7 out of 10 rating, which helped offset its “comparatively weaker environmental and transport infrastructure score compared to other top-tier cities.” level”.

The fund management group said London is “not outstanding on any measure” of economic performance, covering GDP, population, retail spending and median household income, but that it is performing “fairly well” on each. from them.

The Index ranks the performance of cities according to four key criteria (economic, environmental, innovation and transportation) in an effort to “identify those that combine economic dynamism with high-quality educational institutions, transformative environmental policies and excellent transportation infrastructure.”

On innovation, Schroders highlighted the capital’s “world-class” universities such as UCL, Kings and Imperial, while the city also ranks fifth for venture capital funding flows globally.

But London also “suffers from severe road congestion and poor public transport reliability,” the report states, as well as “extremely poor water quality and a high likelihood of future water stress.”

Meanwhile, Manchester remained in the top 30 thanks to its environmental score, with the northern city enjoying a “naturally cooler climate and low exposure to natural hazards, along with strong net zero policies with specific emissions reduction targets.” emissions”.

Schroders said: “Overall, Manchester performs well across all metrics, with no areas where it is ‘held back’ by an unusually low score. This is what allows it to ‘punch above its weight’ in the index, placing it among European capitals and medium-sized American cities.

“Although London comfortably surpasses Manchester in terms of the absolute size of its population, GDP, median household income and aggregate retail spending, we expect median household income to grow faster in Manchester than in London over the period to 2033. although against a lower base, which increases its economic score.

‘On innovation, Manchester is somewhat disappointed in terms of venture capital funding streams, but this is offset by the University of Manchester’s strong performance at the university level. However, unlike London, the ‘long tail’ of university performance is less impressive.’

But it was a particularly strong year for American cities, and the artificial intelligence revolution helped keep San Francisco in first place.

Texas cities had a strong year: Houston rose more than 40 spots, Dallas rose from 58th to 20th, and Austin rose from 45th to 34th.

Shenzhen remains the highest-ranked Chinese city, thanks to its position at the forefront of the consumer electronics industry.

Hugo Machin, portfolio manager at Schroders Global Cities, said: ‘This year’s clear winners are the largest US cities, such as Houston and Dallas, which have benefited from a re-evaluation of the transportation score used in the rankings. .

‘This year, the Index places less importance on walking time and more on total transport time, as we believe that cities should take a holistic approach to organizing urban transport.

‘Furthermore, while it will hardly be an eye-opener to many, the data continues to indicate that wealthy citizens continue to move to places that have low crime rates and tax thresholds.

“This is why Austin, Miami and Charlotte have grown strongly in recent years; Austin is now home to more Fortune 500 companies than any other place in the US.”