Improved Sentiment among the Self-Employed in Germany

Sentiment among the self-employed in Germany has improved. The Business Climate Index rose to -14.6 points* in February, up from -22.6 points* in January. This is a finding from the latest ifo survey for this segment (“Jimdo-ifo Business Climate Index for the Self-Employed”). The rise was due to less pessimistic expectations. However, the self-employed are particularly dissatisfied with their order backlog, which continues to shrink. “This segment is still far from optimistic,” says ifo expert Katrin Demmelhuber.

There were positive developments in consulting services (legal, accounting, and management consultancy). “In these difficult times, there is demand for consulting on restructuring as well as for organizational and process consulting,” Demmelhuber adds. Economic developments in retail remained challenging, even if the pessimism regarding business prospects eased somewhat. Many companies reported declines in sales, and inventory increased in February. Despite the difficult order situation, a large number of self-employed people cannot avoid increasing their prices to cover their costs.

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