Deteriorating business environment for self-employed individuals, as indicated by a decrease in the Ifo index, observed in July.
In a concerning development, the business climate for freelancers and small businesses in Germany took a turn for the worse in July 2025. The Jimdo-Ifo Business Climate Index, which measures the economic sentiment of self-employed individuals and microbusinesses, fell from -15.7 points in June to -16.9 points in July, according to a report by the Ifo Institute [1][2][3][4].
The decline was primarily due to a persistent shortage of orders and growing economic pressures faced by the self-employed and microbusinesses. About 43.6% of self-employed respondents reported too few orders in July, although this figure was slightly better than April’s 48.4%, it remains significantly higher than the 36.7% in the overall economy, indicating sustained low demand for freelancing and microbusiness services [1][2].
The retail sector among small operators also experienced a notable downturn with reduced sales and gloomier business expectations contributing to the overall negative business climate [1]. Service providers, in particular, rarely assessed their current business situation positively in July. More respondents expect declining turnover, and their expectations became increasingly pessimistic [1].
The business climate for freelancers in the service sector also deteriorated in July. Many freelancers in retail assessed their current businesses more negatively, and declining turnover was a factor in the negative assessment of businesses in retail [1].
Katrin Demmelhuber, an Ifo expert, stated that the order situation for many freelancers remains critical. Freelancers are facing considerable economic pressure amid ongoing job cuts and uncertainty in industrial sectors [1][2][3]. Despite slight easing in order shortages, the self-employed remain under considerable economic pressure amid broader cautious economic sentiment.
The decline in the business climate index was announced by the Ifo Institute on Monday. The deterioration reflects ongoing demand challenges and cautious outlooks among freelancers and very small businesses within Germany’s economic environment in July 2025 [1][2][3][4].
[1] [Link to source 1] [2] [Link to source 2] [3] [Link to source 3] [4] [Link to source 4]
The decline in the business climate index signifies mounting financial difficulties for small-business owners, particularly freelancers in the service sector. Amid a scarcity of orders and industrial uncertainties, these self-employed individuals continue to face considerable finance-related stress.
