Business Climate for Solo Self-Employed Persons and Microenterprises in Germany Darkens Significantly

In Germany, the business climate for solo self-employed persons and microenterprises darkened significantly in November. This is evidenced by the ifo Institute’s new index for this segment of the economy. The index score was minus 6.2 points, following minus 0.5 points in October. This is significantly worse than the score for the economy as a whole, which stood at plus 11.0. “Microenterprises have been hit much harder by the fourth wave of the pandemic than large enterprises,” says Klaus Wohlrabe, Head of Surveys at ifo.

The worsening of the business climate was due to considerably more pessimism among microenterprises. The indicator for business expectations fell to minus 18.8 points, following minus 7.2 in October. In August, the figure was 0.6 points.

Assessments of the current situation, by contrast, are still slightly positive. That indicator remained practically constant in November, at 6.8 points. However, it is significantly lower than the level for the overall economy (25.6 points).

The ifo Institute has been publishing its own separate index for microenterprises (fewer than nine employees) since August 2021. In November, the new index was based on responses from some 1,300 companies, and this number is being continuously expanded. As in the composite index, all sectors of the economy are taken into account. However, its main focus is the services sector. New participants are won in collaboration with Jimdo and the participation of various professional associations (including VGSD, the German association for start ups and the self-employed). Starting in 2022, the new index, known as the “Jimdo-ifo Business Climate Index for Solo Self-Employed Persons and Microenterprises,” will be published regularly by the ifo Institute.