Four in 10 freelancers reported the outcome of the EU referendum lowered their business performance in the third quarter of 2016. Along with Government fiscal policy relating to freelancers it was the joint top barrier to freelancers’ businesses this quarter. More than half of freelancer also expect Brexit to harm their business in the next twelve months.
A gloomy economic outlook?
Freelancers remain concerned with the direction of the UK economy. Six in 10 report a negative outlook for the economy over the next twelve months, while 39 per cent are worried about their business performance in the next year.
But despite uncertainty in the economy, there has been a recovery in business confidence compared to the previous quarter. A third of freelancers expressed confidence in their business performance over the next twelve months. This is compared to just 15 per cent who were positive about their business when surveyed in Q2.
Earning power lowered but things expected to improve
The average daily rate of freelancers fell to £403 per day in Q3 2016. This is down from £421 in the same period last year. Additionally 62 per cent of freelancers expect their business costs to increase in the next year.
More positively, four in 10 expect to increase their rates in the next 12 months. And although day rates have dropped, they remain higher than those of equivalent employees. Freelancers listed personal brand, innovation of services and collaboration with other freelancers as factors that will have a positive impact in the next twelve months.
Commenting on the survey results, Chris Bryce, IPSE CEO, said: “Brexit gave freelancers pause for thought, but confidence may be beginning to return in their business outlook. We want a post-Brexit Britain freelancers can thrive in. Autumn Statement will be critical in returning confidence to the sector and we hope to see the Chancellor announce measures to support independent professionals.”
Rich Pearson, SVP of International at Upwork, said: “Now more than ever, freelancers are in need of fast access to work through easy-to-access platforms. Upwork enables freelancers to connect with clients in 180 countries, limiting the impact of any one country’s economic outlook such as the uncertain period that Brexit has cast over the UK. With three million jobs posted annually, there is an abundance of opportunities available.”
Professor Andrew Burke, Dean of Trinity Business School, Trinity College Dublin, and co-author of the report, said: “The negative impact of the outcome of the Brexit referendum has caused a massive decline in the performance and confidence in the freelance sector. Prior to the referendum the freelance business sector was broadly on an upward trajectory with improving earnings and business confidence. Now, not only has this upward trend been reversed into a downturn but the freelance sector has dived to record low levels of business performance with all the indications that this fall has yet to bottom out.”