Two-fifths of self-employed people in Germany expect prospects to worsen

Two fifths (40.1%) of self-employed people in Germany expect their business prospets to worsen over the coming year, new data from the ifo Institute has found.

According to the institute, close to half of self-employed believe that nothing will change in 2025, compared to what was already a difficult year this year.

‘No turnaround in sight’

“For many self-employed people, there is no turnaround in sight in 2025,” commented ifo expert Katrin Demmelhuber.

Optimism among this cohort remains sparse, with just one in ten (10%) anticipating an improvement in their business situation over the coming year.

The main factor driving this sentiment is the current economic environment in Germany, particularly given the lack of orders being placed.

Investment plans

This pessimism is also affecting investment plans. Over a third of self-employed individuals plan to reduce investment in their business in 2025, while only one in seven plans to increase spending.

“The self-employed are demonstrating a similarly low willingness to invest as the broader German economy,” added Demmelhuber.

At the same time, however, the business climate for self-employed individuals and micro-enterprises has slightly improved, according to the institute.

The Jimdo-ifo Business Climate Index rose in November to -21.3 points, compared to -22.0 points in October. While dissatisfaction with current business conditions has eased marginally, expectations for the future remain in decline.

The Jimdo-ifo Business Climate Index, introduced in August 2021, measures business sentiment among self-employed individuals and micro-enterprises (fewer than nine employees). The index reflects trends across all sectors, with a particular focus on services. Read more here.