Bavaria dominates in the location ranking: This region surprises with 3rd place

The current location comparison by the German Economic Institute (IW) once again shows a striking concentration of economically strong regions in the Free State. While the Munich area defends the top positions, a district in the Upper Palatinate is particularly coming into focus: Tirschenreuth reaches 3rd place – and at the same time is among the most dynamic climbers since the beginning of the evaluation in 2016.

The IW regularly compares 400 regions and independent cities in Germany. Not only classic indicators such as economic performance are evaluated, but also factors that determine whether people and companies stay or move in permanently: for example, the availability of doctors and the proportion of natural areas. These "soft" location features are more than just an accessory in practice – they influence how attractive a region is for skilled workers and how well it can cushion demographic and structural upheavals.

Munich remains at the top – Bavaria provides many top regions

At the top of the ranking is again the Munich district. In 2nd place follows the state capital Munich, which previously held 3rd place. Also in the top group are:

• Munich district (1st place)
• State capital Munich (2nd place)
• Starnberg (5th place)
• Erlangen-Höchstadt (8th place)
• Miesbach (9th place)
• Ebersberg (10th place)

A central signal of the study: Eleven of the 20 strongest regions in Germany are in Bavaria. This speaks less for a single success model than for a broad strength that is spread across several areas – from highly dense centers to districts with industrial SMEs.

Tirschenreuth in 3rd place: Rise through industrial breadth and financial leeway

Particularly striking is the leap of the Tirschenreuth district: In the absolute ranking, the district is in 3rd place. In addition, the study authors certify the region the third greatest dynamic since 2016.

For the development, the authors name several factors that together form a clear pattern:

• Strong individual companies and an unusually broad industrial base, which reduces dependencies and creates stability.
• Nationwide highest municipal tax revenue per capita despite favorable trade tax rates, which opens up leeway for infrastructure, schools, and digitization.

Study author Vanessa Hünnemeyer, who works at IW Consult in the field of regional development and location factors, describes another part of the structural change: In recent years, more and more management and development areas have settled in the region. This indicates an upgrading within the value chain – away from pure manufacturing, towards planning, research, and management.

Examples of investments and companies in Tirschenreuth:

• Siemens Healthineers in Kemnath (double-digit million sums)
• Special glass manufacturer Schott in Mitterteich
• Industries such as plastics and wood processing
• Meat products provider Ponnath in Kemnath

Why Bavaria remains ahead in comparison – and where risks become visible

In the overall assessment, the study authors see Bavaria as economically broader than other federal states. Even Baden-Württemberg, traditionally also strong, has fallen somewhat behind in recent years. As a background, the authors refer to a stronger focus of Baden-Württemberg on industries such as the automotive industry.

Bavaria is also affected by the problems of the automotive industry. The difference lies in the greater diversity of important industries: In addition to automotive value chains, aerospace and medical technology play a greater role. This reduces risks by mitigating dependence on a single structural break.

The fact that the top group is not only made up of Bavaria is also shown by Frankfurt am Main (4th place) and the Main-Taunus district (6th place). This underlines the importance of individual metropolitan areas and at the same time makes visible how strongly Bavaria is represented in the overall picture.

Not all regions in the Free State benefit equally

However, the study does not paint a uniform picture of Bavaria. There are also regions that have lost attractiveness. An example is the district of Dingolfing-Landau: Although it is still in 52nd place out of 400, it has recently slipped significantly in the ranking.

One factor mentioned is the reduction of around 2,000 temporary jobs at BMW in Dingolfing since the last IW study. Such changes often make the difference in rankings.

Further examples of regions with declines in the lower half of the ranking:

• District of Wunsiedel (220th place)
• District of Hof (238th place)
• City of Hof (329th place)

All in all, the core statement of the IW evaluation remains clear: Bavaria continues to provide an exceptionally large number of top regions – supported by economic diversity and powerful centers. At the same time, the ranking shows how much development within the Free State can diverge: Where industrial breadth, tax power, and higher-value functions come together, regions rise. Where dependencies are greater, individual cuts can leave more significant marks.