Freelancer Confidence Index Q1 2020

  • In Q1 2020, freelancers’ 3-month confidence in the economy dropped by over 100 per cent and their confidence in their businesses for the same period fell by more than 300 per cent because of the COVID-19 health and economic crisis.
  • Freelancers believe that the crisis will have a prolonged negative effect on both the economy and their businesses, which will be most severe in Q2 2020.
  • Added to the drop in confidence, freelancers have seen a fall in pay and the amount of work they are doing.
  • Their spare capacity (the amount of weeks they are not working) rose from 2.6 last quarter to 3.3 weeks in Q1 2020.
  • Freelancers’ earnings have fallen by 8.4 per cent over the first quarter of 2020.
  • They are also extremely pessimistic about the coming year, with two thirds predicting a fall in their rates – with the average predicted drop at 20.1 per cent.

This quarter’s results show a drastic decline in freelancers’ confidence in their own business performance and the wider economy – driven by the impact of the COVID-19 health and economic crisis. Freelancers’ confidence in their 3-month and 12-month business performance has reached record lows. Their confidence in the economy is also now at 3- and 12-month lows.

 

 

Remarkable in all these areas is also the sharpness of the decline. Last quarter, there were signs of a recovery in freelancers’ confidence in the UK economy after it reached historic lows because of Brexit. This quarter, however, their 3-month confidence in the economy suddenly dropped by over 100 per cent and their confidence in their businesses for the same period fell by more than 300 per cent.

Freelancers’ confidence in their businesses for the next three months fell from -14.7 in Q4 2019 to -62.6 in Q1 2020. This is the lowest level it has reached since surveys began in 2014. Their confidence in their businesses for the next 12 months has also fallen to by far the lowest level on record: from -23.2 to -57.3.

Confidence in the economy over the next year fell from -39.3 last quarter to -77.8. Meanwhile, confidence in the economy over the next three months fell even lower, from -36.8 last quarter to -86.6. It therefore seems freelancers believe the COVID-19 crisis will have the worst effect on the economy in Q2 2020.

Added to the drop in confidence, freelancers have seen a fall in pay and the amount of work they are doing. Their spare capacity (the amount of weeks they are not working) rose from 2.6 last quarter to 3.3 weeks in Q1 2020.

Although freelancers’ average day rates remained relatively stable at £430 (down just £3 on last quarter), the fall in the amount of work drove their quarterly earnings down by 8.4 per cent. Freelancers are also extremely pessimistic about the coming year, with two thirds predicting a fall in their rates – with the average predicted drop at 20.1 per cent.

Freelancers’ pessimism is clearly driven by their concerns about the impact of the COVID-19 crisis on the economy. All groups surveyed (Standard Occupational Classifications 1, 2 and 3) said the top factor driving down their business performance is – by a substantial margin – “The state of the UK economy”.

 

*Freelancers were asked to rate the importance of 14 different factors affecting the performance of their business in categories ranging from significantly positive and slightly positive, to no impact, slightly negative and significantly negative impact.

Read the full report here

 

More on