Gloomy outlook for the self-employed: business climate continues to plummet

Weak economy - self-employed under pressure: ifo Business Climate Index falls to its lowest level since 2022
Munich, January 13, 2025 - Economic conditions remain difficult for the self-employed and micro-enterprises: The ifo Business Climate Index fell further to -23.4 points in December 2024, after -21.3 points in November. This is the lowest value since October 2022, as reported by the ifo Institute. The index reflects the assessment of the current business situation and expectations - and both deteriorated significantly in December.
The ongoing economic weakness is hitting the self-employed particularly hard
Katrin Demmelhuber, ifo expert
Service sector remains under pressure
The climate in the service sector continued to deteriorate. After a brief stabilization in November, declining orders and falling turnover hit the self-employed. Expectations for the coming months were particularly pessimistic. However, there were some positive signs: management consultancies as well as advertising and market research service providers were able to escape the negative trend.
Retail under pressure - banks cautious
The business climate in the retail sector also remained deep in negative territory. In addition to weakening demand, independent retailers are confronted with tighter lending conditions. Almost half rated the banks' behavior as restrictive, compared to around 34% in the third quarter of 2024. Overall, the availability of credit has improved slightly across all sectors: the hurdle rate for the self-employed fell from 38. 6% to 35.1%.
Since August 2021, the ifo Institute has been calculating the Jimdo-ifo Business Climate Index for solo self-employed persons and micro-enterprises (fewer than 9 employees). It covers the most important economic sectors and places a special focus on the service sector.

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