Business sentiment among self-employed individuals and small businesses in Germany has demonstrated a modest improvement during August. The Jimdo-Ifo Business Climate Index, a key indicator of this sector’s health, rose to -13.8 points, marking a recovery from -16.9 points recorded in July.
According to Katrin Demmelhuber, an Ifo expert, the primary drivers of this upward movement are a lessening of negative assessments regarding ongoing business operations and a reduction in pessimistic projections for the future. While this signals a positive shift, Demmelhuber emphasized that “challenges remain despite these encouraging signals.
However, a recent survey reveals a slight increase in the difficulty self-employed individuals are experiencing in forecasting future business development. In August, 30.1% of respondents indicated they found this assessment challenging, compared to 29.0% in July. This represents a reversal of a previous downward trend in uncertainty and the current level remains higher than that seen within the broader German economy, which registered at 20.8% in August. Demmelhuber highlighted the critical reliance of self-employed individuals on stable and predictable operating conditions.
Within the service sector, sentiment has shown a slight upturn, with more self-employed and small business owners reporting a more favorable view of their current circumstances. Business and revenue expectations have also been revised upwards in August. Notably, the hospitality sector, freelance professionals and management consulting firms have experienced particularly significant improvements. The retail sector also witnessed a notable increase in the Business Climate Index, largely attributable to improved expectations and a marginally better assessment of current conditions.