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The Freelancer Confidence Index recorded its first ever negative index score in relation to freelancers’ business confidence outlook for the next 12 months.
It found more than a quarter (28 per cent) of freelancers were confident in their business performance improving in the next 12 months. This is significantly lower than the second quarter of 2015 when 41 per cent were confident.
The top two factors cited as negatively affecting confidence levels are related to changes in public policy, namely government attitudes towards freelancing and regulation.
Drop in confidence
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The survey found that inflationary pressures on freelancers are modest, with just over half of those surveyed experiencing no inflation or deflation of business costs over the past 12 months. However, almost two thirds of freelancers expect these costs to increase over the next 12 months.
The report also suggested that fewer freelancers are taking time off between contracts. A fall in the number of weeks without freelance work was recorded, dropping from 2.6 weeks in Q2 of this year to 2.2 weeks in Q3 2015.
Key findings
Key findings of the Q3 2015 Freelancer Confidence Index
- IPSE’s headline indicator of freelancers’ confidence in their business stands at -3, down from +11.8 in Q2 2015, which was the highest on record
- Confidence in the UK economy over the next 12 months stands at -4.3, down from +16.1 last quarter
- Sixty-five per cent of freelancers expect business costs to increase in the next 12 months
- Freelancers were on assignment for 83 per cent of Q3 2015, up from 80 per cent in the previous quarter.
Taken a knock
Chris Bryce, IPSE CEO, said: “It is clear that freelancer confidence levels have taken a knock. IPSE is deeply concerned over current proposals for changes to travel and subsistence tax relief and more forceful implementation of IR35 – which still operates under an outdated format.
"These changes have the potential to affect a significant driver of the UK economy and put tens of thousands of freelancers out of business. We call on the Government to rethink these proposals to restore freelancers’ lost confidence.”
Professor Andrew Burke, Dean of Trinity Business School, Trinity College Dublin and co-author of the report, said: “Despite the drop in confidence among freelancers, the sector continues to do very well with high capacity utilisation among freelancers.
"What is impressive is that against an increasingly tough external business environment, freelancers have been able to achieve business performance through their own efforts in brand building, innovation and collaborating with other freelancers on contracts.”
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Susie Hughes © Shout99 2015
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