Freelancers’ confidence in their own business outlook and the economy increased in Q4 2015, according to IPSE, the Association of Independent Professionals and the Self Employed. This increase in confidence follows a record low in the previous quarter.

IPSE’s headline index score indicates freelancers’ confidence in their business stands at +9.8, up from +2.4 in Q3 2015. Meanwhile, confidence in the UK economy over the next 12 months stands at +6.2, up from -4.6 in the previous quarter.

The study was done in association with freelance talent marketplace, Upwork. It showed that 35% of freelancers indicated increased confidence in their business outlook for 2016. This is compared to record low figures in the previous quarter, which showed freelancers felt negatively about the outlook for the UK economy and only 28% of freelancers who felt confident their business performance would improve.

IPSE found that the top factors freelancers cited as having a positive impact on freelance businesses included building their brand and reputation (58.7%) and innovating their services offered (40.9%). These are also the factors freelancers expect will have a positive impact on their business performance over the course of 2016. Over a third (35.7%) of freelancers surveyed also said business performance improved in the last three months due to more organisations adopting flexible working practices.

“It’s great to see freelancers’ confidence in their business and economy bounce back after a significant dip in the Autumn,” Chris Bryce, IPSE CEO, said. “These professionals play a vital role in bringing innovation and specialist expertise to British businesses and they need to be supported. The fact that confidence returned to positive territory after the Government decided to shelve its plans to change the IR35 small business tax, shows just how big an impact government intervention can have on how people feel about running their business.”

However, not all freelancers are positive about this year. The confidence of those working in skilled professional occupations, such as IT project managers, mechanical engineers and journalists improved, but remained negative overall. This group has had a particularly hard year with average quarterly earnings falling by 10.4%.

The study showed that it is the attitude of the UK Government towards freelancing that remains the major factor expected to negatively impact business performance levels in the coming year, the same as in the previous survey. 60% of freelancers also expect increased business costs in 2016.

Among other findings of the study, it showed that freelancers were on assignment for 83% of Q4 2015. In 2015 these levels were consistently over 80%.

 “As a growing number of freelancers in the UK turn online to find work, we expect success and ultimately confidence among this group to increase,” Rich Pearson, SVP of International at Upwork, said. “With 3 million jobs posted annually on Upwork, freelancers have access to more opportunities and don’t have to rely solely on local work to ensure income security.”

"It is good to see freelancers’ confidence returning, but very interesting to observe that the confidence of different freelance occupations diverges so much,” Professor Andrew Burke, Dean of Trinity Business School, Trinity College Dublin and co-author of the report, said. “The results indicate that freelancing is a diverse grouping and with varying business fortunes and performance."