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Employment in Germany continues its positive trend, as announced by the Federal Statistical Office (Destatis) in its current press release No. 326. In Q2 2023, around 45.9 million people were employed in Germany. Compared to the previous quarter, the seasonally adjusted number of employed persons recorded an increase of 67,000 persons (+0.1%). Compared with the same quarter of the previous year, growth of 0.7% was observed. This development reflects an overall positive economic momentum, although the pace of growth is slowing compared to the previous quarter.
The increase in employment is also reflected in the non-seasonally adjusted view. Compared to the previous quarter, the number of employed persons increased by 240,000 persons or 0.5%. This increase is common in the spring, due to the revival of outside occupations. However, this year's spring revival was much more subdued, with a 0.5% increase, than last year's 0.7% growth.
Positive development in service sector
The service sector made a significant contribution to the increase in the number of people in employment. In particular, public service providers, education, health (+0.9%), trade, transport and hospitality (+0.7%) and business service providers (+0.9%) recorded significant increases. Employment in information and communication also grew dynamically by 2.9%. The financial and insurance services sector, on the other hand, recorded a slight increase of 0.1% after years of downward trend.
Labor volume and employment types
The average hours worked per employed person increased slightly by 0.1 hours to 319.1 hours. The total economic volume of work, which takes into account the increased number of employed persons and hours worked per employed person, increased by 0.8% to 14.6 billion hours. The average number of hours worked per employed person increased by 0.1% to 319.1 hours.
The positive 0.7% year-on-year growth in employment was largely driven by employment subject to social security contributions and employees in marginal jobs. The number of employees rose by 0.8% to 42 million persons, while the number of self-employed persons, including family workers, declined by 0.3% to 3.9 million persons.
European comparison
In a European context, employment increased by an average of 1.3% in the 27 European Union (EU) countries and by 1.5% in the euro area compared with the same quarter last year, which is stronger than the increase in Germany.
Conclusion and outlook
The development of employment in Q2 2023 shows continued positive momentum in the German labor market. Despite somewhat slower growth compared with the previous quarter, the upward trend remains year-on-year. The service sector in particular is contributing to the increase in employment, while the manufacturing sector also posted slight gains. The revival of the labor market is also apparent in the European context. However, possible effects of international events, such as the war in Ukraine, should be kept in mind as they could impact future developments. The strength of employment thus remains an important indicator of Germany's overall economic health.
Note: The results presented here are based on preliminary calculations by the Federal Statistical Office (Destatis) and could be revised by further data updates.
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.
The income of a self-employed person can vary greatly, as it depends on a number of factors, such as the type of work, the industry, the location, the demand for the services or products offered, the personal workload, and the efficiency of the business model. Self-employed individuals can work as freelancers, entrepreneurs, artists, craftsmen, consultants, and in many other roles. Here are some considerations:
Income volatility:
The self-employed may have erratic income due to fluctuating orders, seasonality, and other factors.Responsibility for business expenses: Self-employed individuals often have to pay their own business expenses, taxes, and insurance.
Income range: some self-employed people may earn a comparable income to employees, while others may earn less due to various factors.
It is difficult to give an exact range for self-employed income, as it depends heavily on the specific job, industry and individual business success. Self-employed individuals have the opportunity to earn a good income through hard work and effective business management, but there can also be uncertainties and financial challenges.
The income of a self-employed person can vary greatly, as it depends on a number of factors, such as the type of business, the industry, the
Before starting your own business, it is important to conduct thorough business planning, develop realistic income expectations, and consider financial hedges to be prepared for unforeseen fluctuations.
Business optimism among self-employed and small business owners deteriorated for the third straight month in June 2023, the latest Jimdo Ifo Index shows. The results of this monthly survey leave no room for doubt: sentiment in the sector has continued to deteriorate, which should prompt a call for government action.
According to Katrin Demmelhuber, an expert at the Ifo Institute, the business climate among the self-employed deteriorated worryingly in June. This was characterized by two main factors: On the one hand, the respondents assessed the current situation increasingly negatively compared to the previous months. On the other hand, expectations regarding future business development were even more pessimistic than they had been in the current year. This deterioration follows a period of recovery that began after the energy crisis bottomed out in October 2022. Hopes that the fall in April was only temporary were finally dashed. The negative trend continued in May and is now continuing.
The Jimdo Ifo Index shows that the business climate for the self-employed fell a further 4.0 points in June and is now at minus 12.6 points. In the economy as a whole, the value has fallen even more significantly, namely by 5.5 points, and is now minus 6.6 points. Demmelhuber notes that the indicators for climate and expectations in the overall economy have also fallen significantly. However, the business situation in this sector was still rated as favourable.
One alarming aspect is the declining mood among the solo self-employed and micro-entrepreneurs. In June they rated their business situation clearly negative for the first time this year. The corresponding value is minus 2.6 points, compared to minus 0.4 points in the previous month. This is in sharp contrast to the overall economy, which is still in positive territory at 13.5 but down 2.5 points from May's 16.0.
A possible reason for this development could be the slowly decreasing inflation, which leads to a decreasing pressure on prices. Price expectations have been falling for months. Among the self-employed, 15.6 percent of respondents say they are considering price increases, compared to 16.3 percent for the economy as a whole. In spring 2022, these values still reached peak values of 61.4 (overall economy) and 54.7 (self-employed).
It is important to view the ongoing negative sentiment in the context of the declining number of founders and the self-employed. The number of start-ups in Germany has fallen by two-thirds since 2002, and the proportion of self-employed people in the workforce has fallen by more than 30 percent since 2012. Andreas Lutz, Chairman of the Association of Founders and Self-Employed Germany (VGSD), comments on this development and emphasizes the need for measures on the part of the federal government to reverse this trend. Lutz calls for the establishment of contact persons in parties and ministries who are specifically dedicated to the concerns of the solo self-employed and who can build up the necessary expertise to make well-founded decisions.
Freelancing, or working on your own as a freelancer, has both advantages and disadvantages. Here are some of the most important ones:
Advantages:
Flexibility: as a freelancer, you have the freedom to determine your own working hours and location. You can adapt your work to your personal needs and priorities.
Independence: You are your own boss and have full control over your work. You can make your own decisions and don't have to compromise.
Potentially higher income: As a freelancer, you have the opportunity to charge higher hourly rates or project fees than you would in a traditional salaried position.
Varied work: as a freelancer, you have the opportunity to work with a variety of clients and projects, which provides variety and challenge.
Disadvantages:
No guaranteed income: As a freelancer, there are no fixed income guarantees. You may have to go without assignments and income for some time.
Self-employment means working alone: As a freelancer, you often work alone, without colleagues or supervisors, which can affect social interaction and motivation.
Administrative tasks: As a freelancer, you will have to take care of administrative tasks yourself, such as invoicing, accounting, and taxes.
Uncertainty: As a freelancer, there is always the risk that orders and projects will fall away or that demand will change, which can mean uncertainty and financial instability.
So overall, there are many pros and cons to freelancing. It depends on personal preferences, skills and goals whether this type of work is a good choice.