Ranked: The Megaregions Driving the Global Economy
If you’ve ever flown cross-country in a window seat, chances are, the bright lights at night have caught your eye. From above, the world tells its own story—as concentrated pockets of bright light keep the world’s economy thriving.
Today’s visualization relies on data compiled by CityLab researchers to identify the world’s largest megaregions. The team defines megaregions as:
- Areas of continuous light, based on the latest night satellite imagery
- Capturing metro areas or networks of metro areas, with a combined population of 5 million or higher
- Generating economic output (GDP) of over $300 billion, on a PPP basis
It’s worth pointing out that each megaregion may not be connected by specific trade relationships. Rather, satellite data highlights the proximity between these rough but useful regional estimates contributing to the global economy—and supercities are at the heart of it.
From Megalopolis to Megaregion
Throughout history, academics have described vast, interlinked urban regions as a ‘megalopolis’, or ‘megapolis’. Economic geographer Jean Gottman popularized the Greek term, referring to the booming and unprecedented urbanization in Bos-Wash—the northeast stretch from Boston and New York down to Washington, D.C.:
This region has indeed a “personality” of its own […] Every city in this region spreads out far and wide around its original nucleus.
By looking at adjacent metropolitan areas rather than country-level data, it can help provide an entirely new perspective on the global distribution of economic activity.
Where in the world are the most powerful urban economic clusters today?
The Largest Megaregions Today
The world’s economy is a sum of its parts. Each megaregion contributes significantly to the global growth engine, but arguably, certain areas pull more weight than others.
|Megaregion||Cities||Region||Population||Economic Output (EO)||EO per Capita|
|1. Bos-Wash||New York, Washington, D.C., Boston||North America||47.6M||$3,650B||$76,681|
|2. Par-Am-Mun||Paris, Amsterdam, Brussels, Munich||Europe||43.5M||$2,505B||$57,586|
|3. Chi-Pitts||Chicago, Detroit, Cleveland, Pittsburgh||North America||32.9M||$2,130B||$64,742|
|4. Greater Tokyo||Tokyo||Asia||39.1M||$1,800B||$46,036|
|5. SoCal||Los Angeles, San Diego||North America||22M||$1,424B||$64,727|
|6. Seoul-San||Seoul, Busan||Asia||35.5M||$1,325B||$37,324|
|7. Texas Triangle||Dallas, Houston, San Antonio, Austin||North America||18.4M||$1,227B||$66,685|
|8. Beijing||Beijing, Tianjin||Asia||37.4M||$1,226B||$32,781|
|9. Lon-Leed-Chester||London, Leeds, Manchester||Europe||22.6M||$1,177B||$52,080|
|10. Hong-Shen||Hong Kong, Shenzhen||Asia||19.5M||$1,043B||$53,487|
|11. NorCal||San Francisco, San Jose||North America||10.8M||$925B||$85,648|
|12. Shanghai||Shanghai, Hangzhou||Asia||24.2M||$892B||$36,860|
|14. São Paolo||São Paolo||South America||33.5M||$780B||$23,284|
|15. Char-Lanta||Charlotte, Atlanta||North America||10.5M||$656B||$62,476|
|16. Cascadia||Seattle, Portland||North America||8.8M||$627B||$71,250|
|17. Ista-Burs||Istanbul, Bursa||MENA||14.8M||$626B||$42,297|
|18. Vienna-Budapest||Vienna, Budapest||Europe||12.8M||$555B||$43,359|
|19. Mexico City||Mexico City||North America||24.5M||$524B||$21,388|
|20. Rome-Mil-Tur||Rome, Milan, Turin||Europe||13.8M||$513B||$37,174|
|21. Singa-Lumpur||Singapore, Kuala Lumpur||Asia||12.7M||$493B||$38,819|
|22. Cairo-Aviv||Cairo, Tel Aviv||MENA||19.8M||$472B||$23,838|
|23. So-Flo||Miami, Tampa||North America||9.1M||$470B||$51,648|
|24. Abu-Dubai||Abu Dhabi, Dubai||MENA||5M||$431B||$86,200|
|25. Osaka-Nagoya (tied)||Osaka, Nagoya||Asia||9.1M||$424B||$46,593|
|25. Tor-Buff-Chester (tied)||Toronto, Buffalo, Rochester||North America||8.5M||$424B||$49,882|
|27. Delhi-Lahore||New Delhi, Lahore||Asia||27.9M||$417B||$14,946|
|28. Barcelona-Lyon||Barcelona, Lyon||Europe||7M||$323B||$46,143|
|29. Shandong||Jinan, Zibo, Dongying||Asia||14.2M||$249B||$17,535|
Altogether, these powerhouses bring in over $28 trillion in economic output.
Unsurprisingly, Bos-Wash reigns supreme even today, with $3.6 trillion in economic output, over 13% of the total. The corridor hosts some of the highest-paying sectors: information technology, finance, and professional services.
The largest city in Brazil, São Paulo, is the only city in the Southern Hemisphere to make the list. The city was once heavily reliant on manufacturing and trade, but the $780 billion city economy is now embracing its role as a nascent financial hub.
On the other side of the world, the cluster of Asian megaregions combines for $8.7 trillion in total economic output. Of these, Greater Tokyo in Japan is the largest, while Shandong might be a name that fewer people are familiar with. Sandwiched between Beijing and Shanghai, the coastal province houses multiple high-tech industrial and export processing zones.
The data is even more interesting when broken down into economic output per capita—Abu-Dubai churns out an impressive $86,200 per person. Meanwhile, Delhi-Lahore is lowest on the per-capita list, at $14,946 per person across nearly 28 million people.
Where To Next?
This trend shows no sign of slowing down, as megacities are on the rise in the coming decade. Eventually, more Indian and African megaregions will make its way onto this list, led by cities like Lagos and Chennai.
Stay tuned to Visual Capitalist for a North America-specific outlook coming soon, and a deep dive into the biggest factors contributing to the growth of these megaregions.
Visualizing the Recent Explosion in Lumber Prices
Lumber prices in the U.S. continue to break records as pressure from both the supply and demand sides of the market collide.
Visualizing the Recent Explosion in Lumber Prices
Lumber is an important commodity used in construction, and refers to wood that has been processed into beams or planks.
Fluctuations in its price, which is typically quoted in USD/1,000 board feet (bd ft), can significantly affect the housing industry and in turn, influence the broader U.S. economy.
To understand the impact that lumber prices can have, we’ve visualized the number of homes that can be built with $50,000 worth of lumber, one year apart.
A Story of Supply and Demand
Before discussing the infographic above, it’s important to understand the market’s current environment.
In just one year, the price of lumber has increased 377%—reaching a record high of $1,635 per 1,000 bd ft. For context, lumber has historically fluctuated between $200 to $400.
To understand what’s driving lumber prices to new heights, let’s look at two economic elements: supply and demand.
U.S. lumber supplies came under pressure in April 2017, when the Trump administration raised tariffs on Canadian lumber. Since then, lumber imports have fallen and prices have experienced significant volatility.
After a brief stint above $600 in April 2018, lumber quickly tumbled down to sub $250 levels, causing a number of sawmills to shut down. The resulting decreases in production capacity (supply) were estimated to be around 3 billion board feet.
Once COVID-19 emerged, labor shortages cut production even further, making the lumber market incredibly sensitive to demand shocks. The U.S. government has since reduced its tariffs on Canadian lumber, but these measures appear to be an example of too little, too late.
Against expectations, COVID-19 has led to a significant boom in housing markets, greatly increasing the need for lumber.
Lockdowns in early 2020 delayed many home purchases until later in the year, while increased savings rates during the pandemic meant Americans had more cash on hand. The demand for homes was further amplified by record-low mortgage rates across the country.
Existing homeowners needed lumber too, as many Americans suddenly found themselves requiring upgrades and renovations to accommodate their new stay-at-home lifestyles.
How Many Homes Can You Build With $50K of Lumber?
To see how burgeoning lumber prices are impacting the U.S. housing market, we’ve calculated the number of single family homes that could be built with $50,000 worth of lumber. First, we established the following parameters:
- Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)
- Median single family house size: 2,301 sq ft
- Total lumber required per single family house: 14,496 bd ft
Based on these parameters, here’s how many single family homes can be built with $50,000 worth of lumber:
|Date*||Lumber Price||Total Lumber Purchased||Total Homes Built|
|2021-05-05||$1,635 per 1,000 bd ft||30,581 bd ft||2.11|
|2020-05-04||$343 per 1,000 bd ft||145,773 bd ft||10.05|
|2015-05-01||$234 per 1,000 bd ft||213,675 bd ft||14.74|
|2010-05-01||$270 per 1,000 bd ft||185,185 bd ft||12.77|
*Exact matching dates were not available for past years.
As lumber prices continue to set record highs, the National Association of Home Builders (NAHB) has reported that the cost to build a single family home has increased by $36,000. Most of this cost can be passed down to the consumer, but extremely tight supplies mean homebuilders are unable to start more projects.
The Clock is Ticking
Despite their best efforts to increase output, it’s likely that sawmills across the U.S. will continue playing catch-up in 2021.
“There was a great fear among sawmills to prepare for a downturn. When home buying surged, they could not open up capacity quickly enough.”
– Lawrence Yun, National Association of Realtors
Analysts are now warning that lumber prices could reach a flashpoint, where affordability becomes so limited that demand suddenly falls off. This has led the NAHB to ask the Biden administration for a temporary pause on Canadian lumber tariffs, which currently sit at 9%.
U.S. tariffs on Canadian lumber were first introduced in 1982, and represent one of the longest lasting trade wars between the two nations. The U.S. is currently appealing a World Trade Organization (WTO) ruling that states its 2017 tariff hike was a breach of global trading rules.
Mapped: The State of Small Business Recovery in America
Compared to January 2020, 34% of small businesses are currently closed. This map looks at the small business recovery rate in 50 metro areas.
Mapped: The State of Small Business Recovery in America
In the business news cycle, headlines are often dominated by large corporations, macroeconomic news, or government action.
While mom and pop might not always be in focus, collectively small businesses are a powerful and influential piece of the economy. In fact, 99.9% of all businesses in the U.S. qualify as small businesses, collectively employing almost half (47.3%) of the nation’s private workforce.
Unfortunately, they’ve also been one of the hardest-hit sectors of the economy amid the pandemic. From the CARES Act to the new budget proposal, billions of dollars have been allocated towards helping small businesses to get back on their feet.
Small Business Recovery in 50 Metro Areas
During the pandemic, many small businesses have either swiftly pivoted to survive, or struggled to stay afloat. This map pulls data from Opportunity Insights to examine the small business recovery rate in 50 metro areas across America.
So, has the situation improved since the last time we examined this data? The short answer is no—on a national scale, 34% of small businesses are closed compared to January 2020.
San Francisco is one of the most affected metro areas, with a 48% closure rate of small businesses. New York City has spiralled the most since the end of September 2020.
|U.S. Metro Area||% Change in # of|
Small Businesses Open
(As of Sep 25, 2020)
|% Change in # of|
Small Businesses Open
(As of Apr 23, 2021)
|7-month change (p.p.)|
|New York City||-21%||-42%||-21|
|Salt Lake City||-18%||-23%||-5|
Data as of Apr 23, 2021 and indexed to Jan 4-31, 2020.
On the flip side, Honolulu has seen the most improvement. As travel and tourism numbers into Hawaii have steadily risen up with lifted nationwide restrictions, there has been a 16 p.p. increase in open businesses compared to September 2020.
Road to a K-Shaped Recovery
As of April 25, 2021, nearly 42% of the U.S. population has received at least one dose of a COVID-19 vaccine. However, even with this rapid vaccine rollout, various segments of the economy aren’t recovering at the same pace.
Take for instance the stark difference between professional services and the leisure and hospitality sector. Though small business revenues in both segments have yet to return to pre-pandemic levels, the latter has much more catching up to do:
This uneven phenomena is known as a K-shaped recovery, where some industries see more improvement compared to others that stagnate in the aftermath of a recession.
The Entrepreneurial Spirit Endures
Despite these continued hardships, it appears that many Americans have not been deterred from starting their own businesses.
Many small businesses require an Employer Identification Number (EIN) which makes EIN applications a good proxy for business formation activity. Despite an initial dip in the early months of the pandemic, there has been a dramatic spike in EIN business applications.
Even in the face of a global pandemic, the perseverance of such metrics prove that the innovative American spirit is unwavering, and spells better days to come for small business recovery.
Money2 months ago
Visualized: The Richest Families in America
Misc4 weeks ago
Visualized: Comparing the Titanic to a Modern Cruise Ship
Misc1 month ago
A Visual Guide to Human Emotion
Misc3 weeks ago
These Powerful Maps Show the Extremes of U.S. Population Density
Misc2 weeks ago
Figures of Speech: 40 Ways to Improve your Writing
Markets4 weeks ago
Mapped: The Top 10 Billionaire Cities
Energy3 weeks ago
Visualizing the Power Consumption of Bitcoin Mining
Markets2 months ago
Charted: The Gen Z Unemployment Rate, Compared to Older Generations