Business Climate for Self-Employed Turns Even More Negative

The business climate for Germany’s self-employed has deteriorated. This is a finding by the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). The index fell from -3.2* points in April to -8.6* points in May. “The business community’s worry lines are deepening,” says ifo expert Katrin Demmelhuber. “Not enough new orders are coming in at present.”

This deterioration in the business climate was due primarily to the decline in expectations regarding future developments, which were much more pessimistic than last month. The business situation also worsened. Positive and negative assessments are balancing each other out here. Compared with the economy as a whole, the business climate among the self-employed developed much less favorably. Service providers’ expectations grew more pessimistic, although the current business situation was better in May than in April. In the hotel and catering segments in particular, current business developed significantly better than it had previously. The business situation in the retail sector improved, and pessimistic expectations of future developments decreased somewhat.

The ifo Institute has been publishing the Jimdo-ifo Business Climate Index for the Self-Employed since August 2021. This includes both solo self-employed people and microenterprises (with fewer than nine employees). 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.

*not seasonally adjusted