Munich economy - key data
Population, economic strength, employment, real estate
Munich and the surrounding area are one of Europe's most dynamic business regions. Major rankings have repeatedly shown the Bavarian capital to be among the leading international business hubs as well.
Global players and SMEs, promising start-up companies, large corporations and one-man businesses all enjoy Munichs' prosperous economic climate. A broad and well-balanced mix of industries and an excellent infrastructure are complemented by an unrivalled array of leisure and recreational facilities.
Home to 1.55 million people, Munich is the third-largest city in Germany. It is one of the industrialized world's growing metropolises and is particularly attractive to young, well-educated adults. Forecasts indicate that the resident population will exceed the 1.7 million mark in 2022. Local population growth is also being accompanied by a higher birth rate, which has been steadily increasing for the past ten years. The proportion of foreign nationals – 28.3 percent – is one of the highest in Germany. People from a total of 180 countries live in Munich, cementing its character as an open-minded city of diversity and tolerance.
Munich and the surrounding region form the focal point of business activity in the Free State of Bavaria. 22.3 percent of the Bavarian population live in the Munich region, where they generate 31 percent of the state's Gross Domestic Product (GDP). In 2014, this figure totalled €99,8 billion for Munich itself and €164.7 billion for the region as a whole. The service sector is the region's dominant industry, accounting for 75.7 percent of Munich's GDP. Manufacturing contributes 24.3 percent to Munich's GDP.
In Munich, Germany's second-largest employment hub, a total of 822,000 people hold employment subject to statutory social insurance. Overall, 1.37 million people are gainfully employed in the Munich region as a whole. Employment figures in Munich grew steadily over the last six years, adding a good 2 percent in jobs subject to statutory social insurance per year. This is a trend also visible in Germany as a whole. Still Munich employment is showing much stronger growth than other cities.
For years, Munich's unemployment rate has been the lowest compared to Germany's other major cities with a population of more than 500,000. In absolute terms, this meant an average jobless number of nearly 43,000 persons for the Munich Employment Agency's catchment area in 2016 – an unemployment rate of just 4.3 percent.
Real estate market
Alongside London, Paris and Berlin, the Munich property market ranks as one of the most important in Europe. In 2016, turnover in the housing, industrial real estate and office property markets added up to a total of EUR 12.9 billion, a new record figure and 3% more than in the preceding year.
Data from Colliers International put office space turnover in Munich at 780,300 m² in 2016. This figure marks a year-on-year gain of 3,1%. All of Germany's other six key office locations – Berlin, Düsseldorf, Frankfurt/Main, Hamburg, Cologne and Stuttgart – likewise experienced positive development again and saw vacancy rates decline in 2016. Munich's vacancy rate fell from 3.8% in the previous year to 3.0%.
On the housing market, the average first-time rent for good-quality housing rose to a new peak of EUR 18.39/m², once again the highest figure in any German city. The year-on-year increase of 6,9% was especially high compared to that witnessed in 2014 at 3.75%.
The continuing influx of new arrivals and vigorous demand for real estate on the capital market are making living space in Munich both scarce and expensive. The City of Munich is responding proactively by stepping up the construction of subsidized housing and accelerating the relevant administrative procedures. Since 2011, considerable time and money has been invested to build an average of around 6,600 new apartments per year in Munich. In 2016 there were at least 7.800 new apartments finished. At the same time, rents in all price categories continue to rise in and around the city.