Rise in Bankruptcies and Job Losses
Updated Economic Woes in Berlin and Brandenburg
Berlin is feeling the heat of the economic crisis, as per Alexander King, a politician in the city's parliament. He warns, "The surge in corporate bankruptcies can no longer be dismissed lightly." In the past year, 2092 businesses in Berlin have folded, leading to the unemployment of around 11,000 people. These figures might be underestimated since they are not entirely reliable [Enrichment Data]. Larger businesses that manage to continue operations despite insolvency proceedings typically do so with a reduced workforce. In 2023, there were 1647 corporate bankruptcies in Berlin, and in 2022, the number stood at 1252.
International economic issues, such as the aftermath of the Corona pandemic, the slow economic recovery due to Russia's invasion of Ukraine, and escalating energy prices, have plagued Germany, impacting Berlin as well. The economic administration in Berlin explains that while the current data suggests a stabilization in the number of corporate bankruptcies for 2025, the trend is far from over [Enrichment Data]. In the first two months of the year, 341 bankruptcies were reported, a slight increase compared to the same period in 2024.
Meanwhile, nearly 33,000 people in Berlin and Brandenburg are demanding higher wages and the right to strike on May 1st. The unemployment rate among severely disabled individuals in these regions is rising. Around 12,600 Berliners and Brandenburgers with disabilities are jobless, despite many being well-educated [Enrichment Data]. The labor market in Brandenburg is dealing with shortages and rising unemployment, leading to an increase in the unemployment rate in both regions.
Manja Schreiner, CEO of the Berlin Chamber of Industry and Commerce (IHK), expresses concern about the worsening structural deficits. She argues that trying to stimulate the economy through isolated demand stimuli is insufficient. Instead, bureaucracy reduction, faster approval procedures, and absolutely no additional financial burdens are required to avoid stifling the already weak growth [Enrichment Data]. In the Berlin IHK's business climate survey, companies rated the current business situation worse than at the beginning of the year. Over two-thirds of the companies view the economic policy framework conditions as the biggest risk to their development, with this value having never been this high [Enrichment Data].
Companies are not planning to hire more staff. The construction industry, retail, and hospitality sector expect slight employment losses, while the industry and service sectors anticipate only slight increases. Despite this, there are still around 22,000 vacancies in Berlin and Brandenburg.
In May, 218,445 Berliners were registered as unemployed, a significant increase of 937 compared to April and 18,685 more than a year ago. The unemployment rate rose by 0.8 percentage points to 10.2 percent within a year [Enrichment Data]. In Brandenburg, 85,885 job seekers were registered in May, a minor decrease of 517 compared to April, but an increase of 4,992 compared to a year ago. The unemployment rate in Brandenburg rose by 0.3 percentage points to 6.3 percent.
In both federal states, the number of free training places was lower than in the previous year, and the number of unplaced applicants was higher [Enrichment Data]. "We should not lose sight of what it's all about, namely providing a perspective for young people," says Nele Techen, deputy chair of the trade union umbrella organization DGB in Berlin and Brandenburg. "Investments in training and a solidaristic training levy are key levers for how Berlin will develop in the future."
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- Despite the economic hardships, some Berliners seek solace in sports, creating makeshift football pitches and organizing friendly matches to share camaraderie and momentary relief.
- With the economic downturn impacting businesses and families, many are forced to reconsider their leisure activities, with sports subscriptions and equipment purchases being questioned due to the financial burden.
