Business Climate for Self-Employed Turns Even More Negative

The business climate for Germany’s self-employed has deteriorated, finds the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). The index fell to -18.8 points* in November, down from -16.2 points* in October. “In contrast to the economy as a whole, there’s still no light at the end of the tunnel for Germany’s self-employed,” says ifo expert Katrin Demmelhuber. “We don’t see any sign of a recovery on the horizon.”

“Economic uncertainty among the self-employed is also reflected in their investment plans,” Demmelhuber says. One-third of those surveyed are planning to invest less in 2024, and only one in seven plan to invest more. It’s a different story in the economy as a whole: more companies (28%) are planning to expand their investment activities over the coming year than are planning to curtail them (27%).

Among self-employed service providers, sales development remains tense and sales expectations are becoming more pessimistic. In retail, the climate indicator rose slightly, but sentiment is still subdued and self-employed retailers are expecting business to be rather poor over the festive period.

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