Business Climate for Germany’s Self-Employed Brightens

The business climate for Germany’s self-employed has brightened considerably, finds the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). In September, the index rose to -14.4 points*, up from -19.9 points* in August. “The country’s self-employed appear to be recovering from their economic low point,” explains ifo expert Katrin Demmelhuber. “Whether this improvement will last will become clear over the next few months.”

The biggest shift is that the self-employed are noticeably more satisfied with their current business situation. Their expectations have improved slightly as well. “However, they remain skeptical about the outlook for the months ahead,” Demmelhuber adds. “When it comes to new orders, there’s still plenty of room for improvement.” Sentiment among the self-employed developed more positively than in the economy as a whole, where the business climate in September remained virtually unchanged.

“The self-employed report that they are still finding it hard to get loans,” Demmelhuber says. Although the proportion of survey participants who took part loan negotiations in the third quarter of 2023 was very low (8.3%), 37.4% of those described the behavior of banks as restrictive.

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.

*Balances, not seasonally adjusted