Brexit has had a significant impact on the confidence levels of the UK’s 1.91 million freelancers, according to a national survey conducted by IPSE, the Association of Independent Professionals and the Self Employed, and Upwork, a freelancing website.
Four in ten (42 per cent) freelancers report that the outcome of the EU referendum affected 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 freelancers (51 per cent) also expect Brexit to harm their business in the next 12 months.
The study finds that freelancers remain concerned with the direction of the UK economy. Six in ten (59 per cent) report a negative outlook for the economy over the next 12 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 (33 per cent) of freelancers express confidence in their business performance over the next 12 months. This is compared to just 15 per cent who were positive about their business when surveyed in Q2.
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 ten (42 per cent) 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 list personal brand, innovation of services and collaboration with other freelancers as factors that will have a positive impact in the next 12 months.
Chris Bryce, IPSE CEO, thinks that Brexit gave freelancers pause for thought, but confidence may be beginning to return in their business outlook.
He adds, ‘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.’
Professor Andrew Burke, Dean of Trinity Business School, Trinity College Dublin, and co-author of the report, agrees that the referendum had a negative effect on the performance and confidence in the freelance sector.
He says, ‘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.’