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Berlin Sets the Pace for European Business Growth

  •  Berlin saw a 22%* increase in the number of active** businesses in operation in the last 18 months 
  •  Brussels sees contraction in the number of active companies in the same period and highest number of business failures
  •  London has the lowest percentage of business failures in the last 18 months at just 0.39%***

New analysis published by Creditsafe, the world’s most used provider of company credit reports, reveals Berlin is significantly outpacing its rivals when it comes to the growth in active companies.  Berlin has witnessed an 22% increase in the number of active businesses in the last 18 months, significantly ahead of Paris (14%) and London (9%).  While many capital cities are witnessing rapid upsurge in new enterprises, Brussels is struggling for economic growth having witnessed a 0.7% contraction in the number of active companies in the period.

Creditsafe’s analysis highlight the relatively low rate of business failure in London compared to other major European capital cities.  In the 18 month period analysed, London had a business failure rate of just 0.39% compared to Berlin’s 0.75% failure rate.   Both capitals compare extremely favourably to Paris where business failures reached 2.95% and Brussels at 3.15%. There were 37 fewer active companies operating in Brussels at the end of the first half of 2015 than at the start of 2014.  All the metrics point to companies in Brussels operating in a difficult economic climate, as the city lags behind major European capitals that are experiencing rapid growth.

Table one: Business change across major European capital cities

City Number of startup
enterprises Jan 2014-July
2015
Percentage change in number
of active businesses Jan 2014
July 2015
Percentage of firms
failing over Jan 2014
July 2015
London 60,030  9%  0.39%
Berlin 10,610  22%  0.75% 
Paris 8,695  14%  2.95% 
Brussels -37  -0.7%  3.15% 

Source: Creditsafe, October 2015

Rachel Mainwaring Operations Director of Creditsafe said: “The analysis points to huge variance in economic recovery and growth across Europe.  While London, Berlin and Paris are all successfully incubating new businesses Brussels is going in reverse.  However, even in rapidly expanding cities thousands of businesses are still failing each year. It is therefore imperative to check out potential suppliers and partners with a detailed credit report.”

The London business market is dominated by business support services, management consultancies and technology consultancies.  Berlin’s biggest industry sector by contrast is real estate, while in Paris it is firms offering professional, scientific and technical activities.  Perhaps reflecting the tastes and desires of European diplomats at two, three and four on the list of largest business categories in Brussels are ‘eating-houses with limited service’ ‘eating-houses with full service’ and ‘cafes and bars.’

Notes to Editors

* Creditsafe analysis of business operation in London, Paris, Berlin and Brussels September 2015
** Active companies, Limited Companies only, companies with a positive rating, in the top European cities
*** All companies which have a rating of ('-51','-28','-26','-25','-23','-21','-16','-12','-11','-1') between 1/1/2014 and 30/06/2015, excluding voluntary liquidations in the top European cities.


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