“Cause for concern”: Almost every second self-employed person complains about a lack of orders

“Cause for concern”
Almost every second self-employed person complains about a lack of orders

February 19, 2024, 4:03 p.m

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High costs, weak economic activity and inflation: the economic environment is increasingly putting pressure on the self-employed. According to a survey by the IFO Institute, almost half are affected by a lack of orders. They are pessimistic about the coming financial year.

Almost every second self-employed person complains about a lack of orders. 47.9 percent reported this in January, after 45.3 percent in October, as the Munich IFO Institute announced in its quarterly survey. “The backlog of orders for the self-employed is literally melting away,” said IFO expert Katrin Demmelhuber. “The associated decline in sales is a cause for concern.”

Accordingly, the mood among the self-employed deteriorated noticeably at the beginning of the year. Above all, they rated their current situation worse than in the fall. Their expectations for the next six months remained very pessimistic. As a result, the business climate index fell to minus 22.6 points in January, after minus 17.5 points in December. “The general economic environment is increasingly unsettling the self-employed,” said Demmelhuber, summarizing the results of the survey.

Europe’s largest economy shrank by 0.3 percent last year. According to the federal government’s draft annual economic report, in 2024 there should only be a mini-plus of 0.2 percent. The situation is “dramatically bad,” admitted Economics Minister Robert Habeck. Expensive energy, high interest rates, a weak global economy and persistent inflation are currently putting pressure on many companies.

The IFO Institute has been calculating the business climate index for the self-employed since August 2021. This includes both self-employed people and micro-enterprises with fewer than nine employees. Although all sectors are represented, the focus is on service providers. The barometer is based on a collaboration with Jimdo, a provider of online tools specifically for self-employed people and small businesses. The Association of Founders and Self-employed People in Germany is also helping to attract new participants.