Boom Cycle of Berlin's Economy Confirmed by Local Players
A recent poll that Creditreform Berlin Brandenburg and IBB Investment Bank Berlin conducted among roughly 1,500 small and medium-sized companies revealed that the economy of the German capital is going through a robust boom cycle. The companies were asked to provide an assessment of their current business situation, among other things. The overwhelming majority (64.5 percent) of these enterprises rated the situation as “good” or indeed “excellent.” Due to the persistently strong demand for housing, the building trade in Berlin ventured a particularly positive assessment of its own situation (72.8 percent of the respondents rating it as “good” or “excellent”). At the same time, nearly two thirds (65.9 percent) of the companies in the service sector rated their present business situation as favourable and above-average. Compared to the previous year, more than half of the polled mid-market companies were actually able to increase their revenues. Only 13.9 percent of the companies suffered setbacks, whereas one third (30.6 percent) reported stable revenues.
Berlin's Economy Keeps Outperforming in 2016
It is thus generally safe to say that Berlin's economy consistently maintains its success trajectory of the past ten years. Since 2006, the number of insurable jobs in Berlin has been growing at a faster pace than the national average. In 2016, nearly one in every three companies polled (30.4 percent) claimed to have been hiring lately. Only one in nine companies (10.7 percent) cut jobs. And chances are that the job growth will continue in the near future. More than one fourth of the companies based in Berlin (27.7 percent) intend to create new jobs.
Entrepreneurs Maintain a Bright Outlook
On top of that, Berlin's small and medium-sized enterprises take a decidedly upbeat view of the future economic trend. Revenues are expected to keep rising by 42.4 percent of the respondents. In the eyes of IBB, this is mainly explained by the currently stable economic environment. Asked to give an estimate of their growth in revenues and earnings, Berlin-based companies actually proved more optimistic than the national average. Out of the companies polled in Berlin, 38.8 percent said they expect revenue growth going forward, whereas the percentage of mid-market companies nationwide who consider an increase in earnings realistic equals barely one third (29.3 percent). Companies from the service sector displayed a particularly high degree of optimism in this regard.
According to IBB, Berlin's economy did maintain its brisk growth rate, which equalled three percent in 2015, during the early months of 2016. Calculations done by IBB economists suggest that the city's gross domestic product showed a 2.7-percent growth year-on-year by the end of the opening quarter of 2016, while the growth projected for the second quarter is 2.2 percent (Germany as a whole: 1.5 percent).