Germany's independent entrepreneurs are experiencing an "economic downturn"
Freelancers in Germany are facing a dire situation as the number of those struggling with a lack of orders continues to climb. According to the Ifo Institute, over half of freelancers reported having too few orders at the start of the year, with the mood among freelancers and small businesses hitting a new low.
The situation is alarming, with 50.5% of freelancers complaining about a lack of orders in January, compared to 48.5% in October and 45.3% the previous year. Freelancers' woes significantly outpace the overall economy, where 40.2% reported the same issue. This worrying trend has led Ifo expert Katrin Demmelhuber to remark that "the order cushions of freelancers are melting away," causing revenue losses and raising concerns.
Germany's economic downturn isn't limited to large companies. In fact, Europe's largest economy is grappling with a persistent slump that shows no signs of improvement. The forecast for 2024 predicts a 0.2% shrinkage in GDP, following a 0.3% decline in 2023. If these predictions hold true, Germany will experience its longest economic downturn since 2002/03, with economists predicting a 0.1% contraction in 2025.
The situation is further complicated by various challenges freelancers face. Issues such as late payments, misclassification, and cultural and legal barriers can make it difficult for freelancers to secure orders and maintain their businesses. Add the government crisis and public perception problems to the mix, and you have a perfect storm of challenges for Germany's freelance community.
Infrastructure and bureaucracy further exacerbate the situation. Desolate roads, broken railways, failing schools, and cumbersome bureaucracy add to the overall sense of economic struggle in Germany. This complicated environment is making everyday life difficult for many, contributing to the high number of struggling freelancers.
In short, the combination of economic downturn, freelancer challenges, and social and political factors is making it difficult for freelancers in Germany to thrive. The situation is grim, but there may be room for hope as new measures are being considered to boost the economy and support freelancers.
The BDI (Bundesverband der Deutschen Industrie) has expressed concern over the worsening situation of freelancers, highlighting the need for policy interventions to address their challenges. The lack of orders among freelancers is heavily impacting their revenue, as indicated by the BDI's research showing that 50.5% reported having too few orders in January.
