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Berlin: economy remains on growth track

Berlin´s economy recorded an upward trend in 2014. This year an increase in growth of 2,2 percent is expected. With that, the capital would stay above the national average of up to 2 percent again. Accordingly the atmosphere among enterprises in Berlin is optimistic: the majority evaluates the current economic situation as positive. This is one of the results of the KMU-report of 2014, in which the ‘Investitionsbank Berlin’ and ‘Creditreform’ questioned more than 1,000 small and medium-sized enterprises.

In 2013 every second enterprise recorded and increase in turnover

58 percent of Berlin´s enterprises evaluate the current business situation as ‘very good’ or ‘good’ and therefore make for a slightly better atmosphere in comparison with last year (2013: around 57 percent). Encouraging is furthermore the revenue development of the firms: last year half of them achieved an increase in revenue, another 31 percent managed to maintain a stable turnover compared to the prior year. Solely 18 percent of the companies suffered losses. With that, the record level of 2012 was narrowly missed – back then around 55 percent of the enterprises achieved an improvement of turnover. Furthermore, the profit situation of small and medium-sized businesses developed positively: almost half of the respondents were able to increase their earnings in 2013.

The upward trend is not supposed to find an end within the last months of this year: almost every second undertaking expects an increase in turnover, four in ten enterprises await even higher yields. In 2013 the prognoses were alike the ones this year. Significantly more optimistic than last year is the construction industry, which benefits from the growing number of building permissions. About one third of the construction firms forecast an increase in profits in 2014. Last year only 25 percent were that optimistic.

Berlin’s enterprises increase their staff

The ongoing economic upswing shows its impact on Berlin´s labor market: in May this year there were 9,000 less unemployed people compared to same month of the previous year. The unemployment rate decreased from 11.8 percent (May 2013) to 11.1 percent (May 2014). The current numbers show a downward trend. The unemployment rate in October 2014 amounted to only 10.7 percent.  This development is supported by the middleclass of Berlin. Around one third of the questionees employ more staff than previous year. And the personnel planning is still developing: almost 27 percent of the enterprises announced an increase of the workforce. Even though in 2013 the figure of almost 31 percent was higher, the staff reductions reduced from 9 to 6 percent.