Economy of São Paulo

Trade panel of BM&F Bovespa, the São Paulo Stock Exchange

Paulista Avenue is the international financial centre of the city.

The headquarters of Petrobrás in São Paulo

The headquarters of SAP AG in São Paulo

São Paulo is the 10th richest city in the world,^[1] and is expected to be the 6th richest in 2025.^[2] According to data of Fecomercio/SP, its gross domestic product (GDP) in 2011 was R$450 billion.^[3]

The biggest financial center in Brazil and one of the biggest financial centers in the world, São Paulo's economy is going through a deep transformation. Once a city with a strong industrial character, São Paulo's economy has become increasingly based on the tertiary sector, focusing on services and businesses for the country. The city is also unique among Brazilian cities for its large number of foreign corporations. Many analysts point to São Paulo as an important global city, even though this assignment can be criticized considering its serious problems of social exclusion and spatial segregation.^[4] Although being the most important financial centre of the country, São Paulo also presents a high degree of informality in its economy.^[5]

São Paulo is the business center of the Mercosur economy. Acclaimed as a city of business tourism, attracting today's biggest and most important international events, be they in the economic, cultural, scientific or sporting area. It holds more than 200 events per day, offering more than 250 thousand square meters of space in pavilions and areas for congresses and fairs. This is without taking into account the supply of spaces within hotels, which adds another 70 thousand square meters, suitable for holding events. According to the International Congress and Convention Association (ICCA) that ranks the greatest event centers in the world, São Paulo is the most important destination for international events in the Americas. São Paulo is also among Top 20 destinations for events in the world and left behind destinations like Madrid, Sydney, Athens and Vancouver.^[6] Adding space in nightclubs, cultural and business areas, clubs and other alternatives to these numbers, São Paulo boasts approximately 430,000 square meters for the holding of any type of event.

There is still the supply of approximately 30,000 apartments of various categories, a number which is to grow significantly in the next two years, predicted to reach 50,000 apartments in 2003, catering for those seeking the more luxurious options of the large chains, to simpler and more economical options. It is worth pointing out that from the tourist attractions the following stand out: gastronomy and culture. With more than 12,000 restaurants of more than 40 different world cuisines, besides the 70 museums, more than 200 cinemas, around 50 theaters, art galleries and cultural centers, São Paulo has one of the liveliest night-lives in the world.^[7]

If the city of São Paulo were a country, its economy would be the 47th in the world, bigger than Egypt and Kuwait, for example, about the same size as Hungary, New Zealand or Israel. The economy of the city of São Paulo would also be bigger than 22 U.S. states, such as Hawaii and New Hampshire.^[8]

In 2005, the city of São Paulo collected R$90 billion in taxes, and the city budget was R$15 billion; these figures show that São Paulo contributes to redistribution of wealth. The city has 1,500 bank branches. There are 70 shopping malls. Of all the international companies with business in Brazil, 63% have their head offices in São Paulo. According to Mystery Shopping International, the Oscar Freire Street is the eighth most luxurious in the world.^[9]

A connected city, always in the vanguard of the greatest cultural movements that changed Brazilian behavior and habits. In higher education, the University of São Paulo (USP) is in the top 100 public universities in the world and, recently, in the annual raking of the British newspaper The Times, as the first university in South America. There is also a wide range of short courses, lectures, seminars, literary discussions and a several universities and cultural centers teaching from handicraft to technology.^[10]

The São Paulo Stock Exchange (BM&F Bovespa) is Brazil's official stock and bonds exchange. The BM&F Bovespa is the largest stock exchange in Latin America and third largest in the world. In the Stock Exchange, R$6 billion (US$3.5 billion) change hands every day.^[11] If the Greater São Paulo were a country would be the thirty-third richest nation in the world (in nominal GDP), ahead of the United Arab Emirates and Hong Kong for example and twenty-eighth richest nation ahead of Belgium and Venezuela (in GDP PPP).^[12] São Paulo is the best city to do business in Latin America. The large growth of São Paulo GDP is due to the great economic potential of the city and the appreciation of the Brazilian real to the U.S. dollar. The per capita income for the city was R$39,799 (2011).^[13] According to PricewaterhouseCoopers annual economic growth of the city is 4.2%.

Manufacturing

Industrial development, beginning in the late 19th century but intensifying after World War II, has transformed metropolitan São Paulo into the foremost industrial centre in Latin America. The city has outgrown its status as the "Chicago of South America," because it actually plays a greater role in Brazilian commerce and industry than any one city in the United States. The value of its industrial production is by far the largest of any Brazilian city. Its leading industries produce textiles, mechanical and electrical appliances, furniture, foodstuffs, and chemical and pharmaceutical products. Heavy metallurgical plants located in nearby Taubaté, oil refineries and chemical plants in Cubatão, and plants manufacturing motor vehicles, transportation equipment, and farm machinery in Santo André, São Bernardo do Campo, São Caetano do Sul, and Diadema make large contributions to production. Computer industries and the manufacturing of electrical appliances are on the rise, as are automobile components. The several thousand manufacturing establishments in São Paulo provide employment for more than one-tenth of the population.

Finance and other services

Commerce, both wholesale and retail, is well developed and spread over the city by zones according to specialty, for example, the wholesale garment district in Bom Retiro and Brás. Banks are concentrated in the central Triângulo, as well as along Paulista Avenue, but maintain branches in almost every district. All but the smallest Brazilian banks also represent interests from North America and South America, Europe, Asia, and Africa. São Paulo Stock Exchange has taken on global significance, and diversified financial services rival those of other world centres. No less important in terms of employment are street vending, peddling, and neighbourhood stores. Yet huge shopping malls have sprung up near residential neighbourhoods, and new service industries spawned by the computer age provide increasing employment opportunities for the great number of graduates produced by São Paulo's many universities and technical institutes.

International Trade

Treemap showing the market share of exports by product for the City of São Paulo in 2014 generated by DataViva

As of 2014, São Paulo is the third largest exporting municipality in Brazil after Parauapebas, PA and Rio de Janeiro, RJ. In that year São Paulo's exported goods totaled $7.32B (USD) or 3.02% of Brazil's total exports. The top five material goods exported by São Paulo are Soybean (21%), Raw Sugar (19%), Coffee (6.5%), Sulfate Chemical Wood Pulp (5.6%), and Corn (4.4%).^[14]

References