Business Climate in Germany Falls to a Record Low for Solo Self-Employed Persons and Microenterprises
The business climate for microenterprises and solo self-employed persons in Germany is markedly worse, according to the latest index for this segment (“Jimdo-ifo Business Climate Index”). It plunged to minus 12.1 points (not seasonally adjusted) in July, down from minus 1.1 points in June. “Solo self-employed persons cannot escape the negative pull of the overall economy,” says Klaus Wohlrabe, Head of Surveys at ifo. “Pessimism is increasingly making inroads here as well.”
The positive trend that started in March 2022 has ended abruptly: the indicator fell to its lowest level since August 2021, when the survey was started for the solo self-employed and microenterprises. Companies were less satisfied with their current business. Service providers are still in the best position with 17.7 points, compared with 23.6 points in June. Many retailers are suffering from high inflation. Expectations have plummeted and are marked by clear pessimism.
“Many microenterprises and solo self-employed persons fear that the reluctance and uncertainty of larger companies will lead to fewer orders,” Wohlrabe adds.
Despite greater uncertainty, many microenterprises believe price increases are inevitable. Roughly half of all companies have announced they will be increasing prices in the next three months.
The ifo Institute has been publishing the Jimdo-ifo Business Climate Index for solo self-employed persons and microenterprises (fewer than nine employees) since August 2021. As in the composite index, all sectors of the economy are taken into account. However, its main focus is the service sector. The index is based on a collaboration with Jimdo, a provider of online tools specially geared toward the solo self-employed and small businesses, and aims to improve the visibility of microenterprises. In addition to Jimdo, VGSD e.V. – Germany’s association of founders and self-employed people – is also helping to attract new participants.
