Darmstadt is the German city that’s best prepared for the future, Berlin is the most dynamic and Munich is currently in the best position. But Wolfsburg and Ingolstadt are feeling the effects of the German car industry crisis.
That’s the results from this year's city ranking by the Institut der deutschen Wirtschaft (German Economic Institute, IW) in cooperation with the magazine Wirtschaftswoche and the internet portal Immobilienscout24.
The study compares the development of 71 German cities that are home to more than 100,000 people.
Researchers found the middle Franconian metropolitan region of Nuremberg, Erlangen and Fürth is developing well, while Leipzig and Jena in eastern Germany are also performing positively.
Berlin is most dynamic city in Germany
The capital is most dynamic city of Germany, according to a study. Photo: DPA
Three decades after the fall of the Berlin Wall, the capital took first place in terms of dynamism.
According to the study, Berlin has upped its pace significantly, particularly when it comes to the labour and real estate markets. Between 2012 and 2017, around 250,000 more people moved to Berlin than left.
Munich ranked second in the list of 'dynamic' cities, followed by Fürth, also in Bavaria.
Yet Ingolstadt and Wolfsburg – still among the top 10 last year – crashed to 39th and 49th place respectively when it came to the dynamic ranking.
Munich best performing city
The two car cities also lost ground in the 'current situation' ranking – albeit not so dramatically. Ingolstadt ranked fourth (previous year: second) and Wolfsburg seventh (in the previous year it was fifth). One major reason for this was that the tax revenue of the two municipalities has deteriorated significantly compared with 2012, the year of the boom in the automotive industry.
Munich is the German city that's performing best right now, taking the top spot in the overall ranking for the seventh year in a row. The unique combination of high-performance science and a competitive economy “works like turbo for the greater Munich area,” explained Hanno Kempermann of IW Consult.
The study says Munich is the best performing city in Germany right now. Photo: DPA
The Bavarian capital is followed by Erlangen and Stuttgart. Among the top 10 are the banking metropolis of Frankfurt as well as Hamburg, Regensburg, Würzburg and Ulm. At the bottom end of the table are Bremerhaven (69th place) and the Ruhr cities of Herne (70th place) and Gelsenkirchen (71st place).
For years, major cities in the Ruhr region have been at the bottom of the city rankings. Nevertheless, Kempermann said there were opportunities for the region. Among the plus points are comparatively inexpensive housing, cultural openness, dense population, universities and research institutes, as well as airports.
Darmstadt set for the future
According to the analysis, Darmstadt is the German city that's best equipped for the future.
“The city in southern Hesse is home to a large number of successful and highly innovative companies,” argues Kempermann. These include, among others, the pharmaceutical and chemical group Merck.
Munich, Erlangen, Stuttgart and Jena follow in second place.
According to the study, a new economic powerhouse is emerging in central Franconia around the cities of Erlangen, Nuremberg and Fürth.
The region has experienced some difficulties with big firms, such as Grundig or Quelle leaving, but its commitment to future technologies has helped it cope with change.
How researchers analyzed the data
For the annual city ranking, the company IW Consult of the employer-oriented Institute of the German Economy compares the current situation, rates of change of certain indicators (dynamics) as well as future perspectives of cities with more than 100,000 inhabitants.
Factors such as economic structure, the labour market, real estate, research strength, future industries and quality of life were analyzed.
However, other studies have arrived at different results. Research recently conducted by the Hamburg Institute of International Economics (HWWI) and the private bank Berenberg claimed Berlin has the best prospects for the future – although the study only considered the 30 largest German cities.
The capital city scored with a comparatively high percentage increase in population and the highest growth in the number of people employed.