Economic Struggles Deepen: Over Half of Self-Employed Report Lack of Orders

The economic situation for self-employed individuals and small businesses in Germany has reached a troubling new low, with over 50% reporting a significant lack of orders at the start of the year. According to a recent survey conducted by the Ifo Institute in Munich, 50.5% of self-employed respondents cited insufficient orders in January, a slight increase from 48.5% in October of the previous year. This figure remains notably higher than the overall economy's rate of 40.2%.

Experts indicate that the ongoing economic downturn is particularly severe for self-employed individuals. Katrin Demmelhuber, an expert from the Ifo Institute, stated that the challenges faced by this group have intensified, with order scarcity remaining a critical issue.

The latest 'Jimdo-Ifo Business Climate Index' has also reflected this dismal sentiment, dropping to minus 24.9 points in January from minus 23.4 in December. This trend indicates a continued decline in the economic outlook for self-employed and small business owners. While there has been a slight improvement in expectations for the upcoming months, the overall sentiment remains grim.

Germany's economy is grappling with a prolonged stagnation that affects not only large corporations but also small enterprises. The country's gross domestic product (GDP) contracted by 0.2% in 2024, following a 0.3% decrease in 2023. This marks the first instance of two consecutive years of recession since 2002-2003. The Federal Association of German Industry (BDI) anticipates a further decline in economic performance in 2025, projecting a decrease of 0.1%. If this prediction holds true, it would signify the longest economic slump in the history of the Federal Republic.

The incoming government faces a challenging landscape with little expectation for rapid economic recovery. In the economic report released by the previous administration, forecasts were significantly downgraded. The current Economic Minister, Robert Habeck, has revised the growth forecast for 2025 to only 0.3%, a substantial drop from the previously expected 1.1%.

This ongoing economic malaise raises concerns not only for self-employed individuals but for the broader economic landscape in Germany, as businesses navigate an uncertain future marked by persistent challenges.