Improved business environment for independent professionals in August
In August, the business climate for freelancers and small businesses in Germany showed a notable improvement, according to the latest Jimdo-Ifo business climate index. The index, which measures the current situation and expectations for the future, rose from -16.9 points in July to -13.8 points in August.
This improvement was particularly evident in the retail and hospitality sectors. In retail, the business climate index rose significantly, driven mainly by improved expectations. Freelancers and small businesses in this sector assessed their current situation somewhat better and were more optimistic about the future.
The hospitality sector also showed a significant improvement, with both freelancers and business consultants reporting a better business climate in August. The hospitality industry acts as a key client for regional craftsmen and suppliers, positively impacting freelancers and small businesses linked to these trades.
However, despite this improvement, the situation remains challenging for freelancers and small businesses in Germany. Uncertainty among freelancers regarding their future business development increased slightly in August, after three consecutive declines. Thirty percent of freelancers found assessing their future business development challenging, an increase from 29.0 percent in July.
Freelancers rely on reliable framework conditions and planning security, according to Ifo expert Katrin Demmelhuber. Improved expectations were a key driver for the increase in the business climate index in retail, but freelancers and small businesses still need stable conditions to plan for the future.
In the broader economy, the level of uncertainty remains higher among freelancers than in the overall economy, where the value stood at 20.8 percent in August. However, the mood among service providers has improved somewhat, and business consultants experienced an improvement in their business climate in August.
Overall, the improvement in the business climate in August is a positive sign for freelancers and small businesses in Germany. But, as Demmelhuber notes, they still need stable conditions to plan for the future and continue to grow.
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