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July 05, 2012

Urban world of 2025: Cities and the rise of the consuming class

A new report from the McKinsey Global Institute, Urban world: Cities and the rise of the consuming class, finds that the 600 cities making the largest contribution to a higher global GDP—the City 600—will generate nearly 65 percent of world economic growth by 2025. However, the most dramatic story within the City 600 involves just over 440 cities in emerging economies (242 cities will be in China); by 2025, the Emerging 440 will account for close to half of overall growth. One billion people will enter the global consuming class by 2025. They will have incomes high enough to classify them as significant consumers of goods and services, and around 600 million of them will live in the Emerging 440.



Cities, Buildings and Investment

Cities will need annual physical capital investment to more than double from $10 trillion today to $20 trillion in 2025.

By 2025, cities will need to construct floor space equal to 85% of all residential and commercial building stock today. This is 44 billion square meters. The urban building boom will require a cumulative investment of $80 trillion.

Note - If Broad Group of China gets with partners and franchisees to 30% of commercial construction by 2020, then they could make it up to 15-20% of the cumulative building volume from now to 2025.

Container port volume will rise 2.5 times from 2010 to 2025.

Urban municipal water demand will rise 80 billion cubic meters (40% more than today urban global level).


China is urbanizing at 100 times the scale and at ten times the speed of Britain in the 18th century. This is before the impact and speedup that will come with factory mass produced skyscrapers.




Urban high income (over $70,000 PPP per household) will also be impacted. This will increase from below 20 million households in 2010 to over 60 million in 2025 in the Emerging 440 cities. China will account for 19% of the new urban high income households.

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