Worsening Order Shortage Weighs on the Self-Employed in Germany

Many of Germany’s self-employed reported that their order intake in January was too low. The proportion of those with this complaint increased to 47.9% at the start of the year, up from 45.3% in October. This is a finding from the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). “The order books of the self-employed are plainly melting away,” says ifo expert Katrin Demmelhuber, “and the resulting decline in sales is a cause for concern.”

The mood among the self-employed deteriorated at the start of the year. They rated their current situation in particular as worse, and their expectations for the coming six months remain thoroughly pessimistic. As a result, the Business Climate Index fell to -22.6 points* in January, down from -17.5 points* in December. “The general economic environment is increasingly unsettling for the self-employed,” Demmelhuber says.

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