The discovery by Michael Kimmelman, chief art critic of The New York Times, that London's art scene has overtaken the Big Apple has not played well back home.

New Yorkers see their town as the source of all creation, a one-stop shop for culture. But Kimmelman, on his breathless trail from Titian at the National to the new Saatchi Gallery, via Beck's Futures at the ICA and Days Like These at Tate Britain, arrived at an inescapable conclusion: London has become the art capital of the world.

London has hot artists and a new museum every other year. New York is between generations and cannot get new buildings off the ground. It lacks coherence and unity. Visiting Americans will soon be offered a combined ticket for the Tate, the Saatchi, the Aquarium and the Eye.

A Brit in New York has to queue at four different box offices. London's institutions are fronted by colourful, combative personalities who recognise the power of putting a face to the brand. The names Saatchi and Serota are familiar to commuters on the Clapham omnibus, even to some on the Long Island ferry, but don't bother to ask passers-by who is running the Met or MOMA. The blank looks will confirm the gulf in artistic profile and charisma on either side of the great alliance.

I fly often to New York in the interests of cultural exchange. These days my job seems like export only. All over town I find my compatriots. A superb selection of the Tate's drawing collection has been acclaimed at the Drawing Centre. Younger artists like Cornelia Parker, fresh out of Rodin wraps, are enjoying solo shows. I caught Liam Gillick doing a spot of last-minute vacuuming in his installation at Casey Kaplan on West 14th Street in Chelsea. Neighbouring shops on the same block are new ventures from Brit fashion stars Alexander McQueen and Stella McCartney.

The economic blue period has stopped New York's art in its tracks. Almost every museum development project is on hold for want of funds. Last month, the Whitney cancelled a $200 million expansion, designed by the Dutch architect Rem Koolhaas.

MoMA announced last week that it is running $50 million over its already bloated redevelopment budget of $800 million. Tate Modern cost just £160 million. It seems that the only trick New York has learned from London is how to build a Millennium Dome.

MoMA, presently exiled in Queens, belatedly staging the Matisse Picasso show we saw in London last year. The Guggenheim has had a rough year. Frank Gehry's design for a second gallery in lower Manhattan seems unlikely to be built and the Vegas branch has closed for good. A glimmer of expectation can be found in the announcement of the small and inventive New Museum's move from Soho to a parking lot in the Bowery. But even there the funds are yet to be fully secured, and patrons are thin on the ground.

New York can still turn out spectacular shows. The Met's fortuitously timed Art of the First Cities show, six years in the making, opened last week, just days too soon to benefit from the riches of Baghdad's Mesopotamian heritage. The Guggenheim's

retrospective of America's highestprofile younger artist, the film-maker and sculptor Matthew Barney, delayed for a year - budget cuts again - is more than worth the wait and is drawing in huge, if bemused, crowds.

But while the transformation of the Guggenheim's spiral ramp into Barney's weird world of prosthetics and molten Vaseline is impressive, I'm left with the uncomfortable feeling that Barney is out on a limb and friendless.

If Barney is the New York big budget equivalent of Damien Hirst, generating millions of dollars in sales, he hasn't consolidated a back-up group. Hirst came to the fore as part of a scene and a generation of artists working together. The new Saatchi space celebrates that association, and while Hirst's work shouts louder than the others, it thrives in the company.

Great art epochs evolve through teamwork, and New York can't seem to club together more than a sandwich. While it has influential artists and geographically centralised galleries, I can't put my finger on a trend or tendency that defines a group or collective.

The Madonna/Steven Klein collaboration that closed last week at Soho's hip Deitch Projects is symptomatic of the fragmentation. It was ersatz installation art, with breathy voiceoversand moody images. Anyway, Madonna's more Marylebone than Manhattan these days.

Even the commercial galleries are turning to London for stock. Superdealer Larry Gagosian, currently "in dialogue" with the Inland Revenue Service, has just introduced 32-yearold Londoner Jenny Saville.

The six giant paintings on display apparently sold at half a million dollars each. Gagosian gave his magnificent space last month to another Brit, Douglas Gordon, who brought an elephant into the gallery to plod about for his video camera.

Gagosian was the first American dealer to open a branch in London. Others are following including such major players as Matthew Marks. In business terms, I don't see how it stacks up; most private buyers still live in the US. But New York dealers need to be in London because that is where the trends are being set.

Nothing has changed visibly for the worse in New York, except the economy. But with its financial muscle grown weak, the Big Apple appears uncertain of its artistic direction. London, which is used to scraping by on a sixpence, has no such confidence problem. Therein lies the difference.