Almost half of self-employed workers in Germany report a shortage of orders, according to the latest July survey from the ifo Institute. The data show that sentiment among freelancers and microbusiness owners has dipped again, underscoring ongoing economic pressures.
Business climate index falls
The Jimdo-ifo Business Climate Index for the self-employed and very small businesses slipped from –15.7 points in June to –16.9 in July, reversing recent modest gains. The index reflects the overall mood and expectations in this segment of the economy, which includes businesses with fewer than nine employees.
Orders still lacking
Some 43.6 percent of respondents said they had too few orders, down slightly from 48.4 percent in April, but still far above the figure for the wider economy, which stands at 36.7 percent.
“The order situation remains critical for many self-employed people, despite slight easing,” said ifo expert Katrin Demmelhuber. “They are under considerable economic pressure.”
According to the ifo Institute, more self-employed workers in July assessed their current business situation negatively, and they also lowered their expectations for the months ahead. Service providers in particular were far less optimistic: while a small number still rated their business situation positively, the majority now anticipate tougher times ahead, with a growing share expecting declining revenues.
Retail sector also in decline
The retail sector mirrors this downturn. The ifo survey found that the business climate among small retail operators deteriorated significantly in July. Not only have expectations dimmed, but more self-employed retailers have also rated their current business negatively due to lower sales.
Index background
Since August 2021, the ifo Institute has been calculating the Jimdo-ifo Business Climate Index for solo self-employed workers and microbusinesses. Like the main ifo Business Climate Index, it covers all sectors but places particular emphasis on services, where the majority of Germany’s self-employed operate.
