A new survey of higher-end contracting professionals has registered a sharp decrease in their confidence in the economy. The plunge recorded in the latest “Confidence Index” study from the Association of Independent Professionals and the Self Employed (IPSE) and PeoplePerHour (PPH), was driven by protracted Brexit uncertainties and a major fall in contractors’ incomes.
Britain’s two million flexible workers had grown slightly more optimistic about the economy in Q3 2017, rallying slightly from the record low recorded by the survey in the previous quarter. But in Q4, their confidence nosedived again because of a stinging 17% contraction in day rates and quarterly income plus stubbornly persistent Brexit uncertainties.
These declines are compounded by an additional downward move: the amount of time freelancers spent actively engaged on work projects fell to its lowest recorded level.
In what should sound be an alarming development for the government, the confidence level among contracting and freelancing professionals has now fallen to the second lowest point on record, with 70% of respondents expressing reduced optimism about the UK’s economic performance over the coming 12 months.
Noting that the freelancers participating in this survey were highly skilled professionals involved in projects which generate innovation and growth, Professor Andrew Burke (Dean of Dublin’s Trinity Business School) described their consistently falling confidence as “deeply concerning”, not least because they were exceptionally well-placed to foresee business and economic trends.
They were especially troubled in Q4 2017, he said, because it marked the second consecutive decline in earnings, which had already dropped by 13% in the previous quarter, a downward trend that IPSE’s Head of Research, Suneeta Johal, described as “particularly concerning.”
Professor Burke said that respondents perceived government policy on Brexit, taxation and the regulation of freelance work as harmful to the freelance sector but added that this could yet prove positive if it leads them to conclude that changing government policy could improve their prospects.
PPH founder and CEO Xenios Thrasyvoulou, however, pointed out that freelancers and contractors using the PPH platform had actually seen their incomes increase over the last 12 months.
Emphasising that the Confidence Index also shows that professional freelancers continue to earn significantly more than their conventionally-employed counterparts, he added:
“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.”