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Jimdo-ifo Index for July 2023: Business climate for the self-employed continues to deteriorate - need for action by policymakers

08/16/2023 | By: FDS

The business climate index for the self-employed has deteriorated again in July 2023, and there are signs that there is an urgent need for action on the part of policymakers. The ifo Institute released the latest figures, which indicate that the business climate among the self-employed has continued to decline. Both the current business situation and future expectations were assessed more negatively by respondents. The index for solo and micro entrepreneurs fell by 3.8 to -16.4, while for the economy as a whole it fell by 2.8 to -9.1.

The current trend is reminiscent of the lowest points in recent years. Compared to the low point in October 2022, the assessment of the business situation for solo and micro entrepreneurs has hardly improved. This could be an alarm signal for policymakers, who now need to see themselves in an active role.

Andreas Lutz, chairman of the board of the Association of Founders and Self-Employed People Germany (VGSD), stressed the urgency of positive measures to revive the business climate. The idea of a government commissioner for solo self-employed was discussed as a way to promote the interests of this group and take immediate relief measures.

A positive turnaround is evident in the services sector, which has performed relatively positively in the index since February 2022. However, this sector has also lost ground in recent months. Index scores for the services sector have fallen sharply, and pessimism about future business prospects has increased. This pattern is also evident in various industries within the services sector.

The VGSD, whose members are mostly active in the service sector, emphasizes the diversity of industries in this sector. The different developments in the individual industries highlight the need to pay closer attention to the specific trends and challenges in each sector.

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