Cities punch above their weight in terms of productivity


Cities look set to be more productive than the countries they reside in, as measured by forecasts for gross domestic product (GDP).

A high and growing GDP generally means a talented workforce and this comes hand in hand with demand for real estate.

The chart below uses forecasts from Oxford Economics, an economic research firm. It considers how productive each area looks set to become in the next 10 years.

Looking at San Francisco for example, estimates suggest that between 2015 and 2025 San Francisco will produce 36% more than it does now. The United States in aggregate is only expected to grow by 29% over the same period.

It's clear that many of these cities punch well above their weight and GDP is a key consideration when looking to real estate. It's one of the driving factors in building the Schroders Global Cities Index, but of course it's not considered in isolation. It's complemented by population growth and a number of other factors in trying to determine the future fortunes of the world's cities.

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