Munich companies were spared the feared wave of insolvencies caused by the coronavirus. The number of insolvencies in the city has actually been declining continuously since 2018: from 452 in 2018 to 423 in 2019, 388 in 2020 to just 334 in 2021. This represents a decline of 13.9 percent compared to the previous year and a decline of 26.1 percent within three years. The number of start-ups plummeted to 15,995 in the coronavirus year of 2020, but recovered to 17,248 last year, roughly equivalent to the multi-year average.
Annual Economic Report: Munich's startup scene is flourishing
The Annual Economic Report highlights the success of the Munich startup scene and reports with reference to the Munich Startup Insights of a total of 4.2 billion euros in investments for Munich startups. The report highlights the role of Munich's colleges and universities in the startup ecosystem.
"Munich's startup scene benefits from a high-tech-oriented ecosystem with a unique mix of well-known and internationally successful large companies, established startups, an excellent university and research landscape with outstanding talent, and institutional multipliers."
The digital and startup sectors are becoming increasingly important for Munich's labor market: Last year, 93,400 people worked in Munich's IT and communications sector, approximately 6,628 or 7.1 percent more than in 2020 and 41,600 or 72 percent more than ten years ago. Currently, almost 11 percent of all working Munich residents are employed in the sector.
Trade tax revenues at record high
After the city of Munich's trade tax revenues plummeted by just over one billion euros to 1.7 billion euros in 2020, back payments in 2021 resulted in a record trade tax revenue: Munich collected 3.3 billion euros in trade tax. The city expects 2.8 billion euros in trade tax revenue this year.
In 2020, the city had to take on new debt of €989 million due to revenue shortfalls. Munich's per capita debt rose from €412 per inhabitant in 2019 to €965 per inhabitant in 2021. Due to persistently high investment spending of €1.5 billion last year and €1.9 billion planned for this year, the state capital expects a further increase in debt.
