The latest Confidence Index from the Association of Independent Professionals and the Self Employed (IPSE) and PeoplePerHour (PPH) has shown that British contracting professionals have returned to positive estimations of their prospects for the first time in two years.
The Index measured contractor confidence in their business performance for the coming 12 months. In Q2 2018, the dial swung from the -3.9 recorded in the previous quarter to +5.3 – the highest rating since the fourth quarter of 2015, well before the EU referendum.
The remarkable improvement has occurred improbably against a negative background of intractable Brexit uncertainties, economic pressures and declining day rates.
Day rates fell by 12.2% between Q1 and Q2 this year, cutting average daily income from £430 to £394. Unsurprisingly, freelancers participating in the survey gave an exceptionally low confidence rating in the UK economy of -33.1%. Brexit emerged as the primary reason for this.
On top of this, 75% of the respondents expect business expenses to rise in the coming 12 months by 13.7% on average.
Despite this, freelancers appear to have drawn on their resolve and determination to snatch optimism from the jaws of gloom, recording an unexpectedly high level of business confidence.
The finding appears to bear out the results of a recent IPSE poll which found that contracting professionals choose to work independently and flexibly not primarily because of the money but because they enjoy the skills development and the sense of purpose that project-by-project working provides them.
Describing the surge in confidence among contractors as “extremely heartening”, IPSE’s Head of Research, Suneeta Johal, warned that it was not unshakeable. She urged Government to do more to support them given the downward pressures they were facing. A Brexit deal that works for freelancers and contractors should, she said, be a strong Government priority, adding: “It should also work to restore self-employed confidence in its own policies – not least by stepping back from any plans to extend the disastrous changes to IR35 to the private sector.”
Also commenting on the findings was Professor Andrew Burke, Dean of Trinity Business School, Dublin, who said that the apparent stoicism of the respondents wasn’t easily ascribable to a “keep calm and carry on” mindset, as the possibility of IR35 arriving in the private sector shortly would bring “revolutionary” changes for them to contend with. He urged those in technical, professional, associate professional or managerial roles to “prepare a portfolio of strategies to sustain their businesses through the range of scenarios that could arise”.
Finally, PPH CEO and Founder, Xenios Thrasyvoulou, urged the Government to reconsider IR35 proposals and ensure that freelancer confidence doesn’t return to post-2015 levels.