Although the economic confidence of the UK’s two million freelancers improved marginally in the last quarter – after record-low levels in Q2 2017 – it has now fallen again because of Brexit and a 17 per cent decline in both quarterly earnings and daily rates. They expect this to be exacerbated by an increase in their business costs in 2018.
These significant decreases are compounded further by a drop – to the lowest levels on record – in the amount of time freelancers spent working during each quarter.
Worryingly, confidence in the wider UK economy continues to fall and now stands at the second lowest level on record, with 70 per cent saying they are less optimistic about the performance of the UK economy over the next 12 months.
Professor Andrew Burke, Dean of Trinity Business School, Dublin, said:
“The freelancers who completed this survey are professional, highly skilled, and involved in projects which drive growth and innovation. As a result, they are very well placed to foresee economic and business trends. Their consistent lack of confidence is therefore deeply concerning.
“Freelancers are particularly concerned this quarter because they experienced their second successive reduction in earnings – after a 13 per cent drop in Q3.
“They see the Government’s policies on Brexit, taxation and the regulation of freelance work as the main factors that have had a detrimental effect on the freelance sector. However, this could be seen as quite reassuring because it means they believe changing Government policy in these areas could have a positive effect on the performance of the UK’s freelance businesses.”
Suneeta Johal, IPSE Head of Research, said:
“Brexit has consistently been cited as a significant factor behind freelancers’ lack of confidence but, on top of that, the alarming decrease in their rates of pay is particularly concerning.
“With inflation rising over the quarter it is unsurprising that freelancers also stated that they expect their business costs to rise. Ultimately, this means that freelancers expect their finances to feel squeezed throughout 2018.”
Xenios Thrasyvoulou, founder and CEO of PPH, added:
“The latest figures from IPSE’s Confidence Index make interesting reading and some very good points are made regarding concerns over Brexit. However, while earnings in the overall market are going down, freelancers on the PPH platform have seen their day rates increase over the past 12 months.
“The Confidence Index reports freelancers earn significantly more than employed counterparts. Likewise, PPH’s freelancers have experienced consistently higher earnings than equivalent employees during the course of the last five years, and expect to see a 9.7 per cent increase throughout the next quarter despite the various extraneous factors.
“While there may not always be a surplus of large scale projects available to keep all self-employed professionals working at capacity, flexibility and variety are two of the key attractants of this way of working and there are always shorter projects available for those who wish to enhance their income and utilise spare capacity. It is this that has induced so many UK professionals to follow the freelance path since the global financial crisis.”
Are you concerned with how Brexit may effect your workforce? Take a look at the programme for our Brexit and HR summit which takes place on the 5th July.