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Thursday, October 8th, 2015

Foreign direct investment in Berlin

Foreign direct investment in Berlin

The Investitionsbank Berlin (IBB) estimates an economic growth of 2.5 percent for the third quarter, in comparison to the previous year, which indicates that the economic boom in Berlin will continue to last through the rest of this year. As a result, Berlin would exceed the forecast set for the whole of Germany. According to a statement by the IBB, retail trade above all else drives the economy. The consumer behaviour is influenced by the strong increase in population, the constant bus-loads of tourists and highly increasing wages. However, foreign direct investments also take care of a large economic upturn in Berlin, as confirmed in a current study by the consultancy firm EY. Consequently in the last year in Berlin, 80 foreign investment projects were recorded, which signals an increase of around 220 percent in comparison to the 2013 year, when the quota was at 25 projects. Berlin is therefore the most successful city in the whole of Germany and in 2014 achieved the highest number of foreign business settlements. Frankfurt took second place with 69 foreign direct investments, followed by Düsseldorf, with a total of 50 direct investments from abroad.

Berlin, the German state with the highest increase in direct investments

The German federal state of Berlin gained, in the past year in Germany, the most amount of foreign direct investments and consequently took fourth place in the German state ranking, behind Baden-Württemberg with 224 investments, Hesse with 129, and North Rhine-Westphalia with 126. The German state of Bavaria, where 71 foreign businesses settled in the last year, was thus overtaken by Berlin. The comparison with other European cities shows that only London and Paris received more direct investments over the past year, and Berlin therefore ranks as one of the European trailblazers. Germany is the most popular country for investments, as five German cities are listed in the top 20 European ranking – no other European country boasts as many cities.

International business settlements in Berlin lead to 1595 new jobs

With 26 out of a total of 80 foreign direct investments, American groups alone form by far the biggest group of investors in Berlin. With seven settlements each, companies from China and Great Britain also settle in the German capital.

The job market in Berlin likewise profits from the growing foreign direct investments, with which 1595 new jobs have arisen. Berlin is ranked third in Germany behind North Rhine-Westphalia with 2613 and Baden-Württemberg with 1607 new jobs. In the last year, Germany recorded a total number of settlements from 765 international business, which is an increase of 9 percent from the previous year. Likewise the number of jobs generated in the whole of Germany has increased by 9 percent, which amounts to 11,327 jobs.

Berlin is the most sought-after German city among international investors

Experts have included not only the direct investments that have actually been realised, but also the image of the German states, about which 808 executives and 202 managers from international companies were questioned. The result shows that Berlin is a trailblazer in this survey as well: Berlin is, among investors without business activities, the most in-demand, German city for companies to settle. Investors with business activities in Germany voted Berlin second in the state ranking, behind Bavaria. There are many reasons for the attraction behind Berlin, as the capital city offers, in comparison to other states, favourable rents and wages. At the same time, the international and well-established city scores investors thanks to its young and creative scene.

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