Garage labour rates rising but future bookings fall

Independent garage labour rates are rising quickly, but future bookings have fallen sharply.

Data from Garage Industry Trends, a platform developed by Garage Hive, shows average labour rates have risen from £66.30 per hour to £67.60, with increases in six of the seven weeks measured.

This rise of £1.30 in seven weeks will annualise to an increase of £9.70 or 14.6% by next September, if sustained.

Over the same seven-week period, the number of future bookings for garages has shown a sharp fall – dropping from a peak average of 87 bookings on average to just 71 future bookings for week commencing November 28.

“We’ve got to be careful in how we interpret this data and the conclusions we draw,” said Alex Lindley, director of Garage Hive. “The garage sample group changes as more garages opt in but at the moment the increase in labour rate is clear and not unexpected.”

Garages are facing rising costs driven by factors including skilled technician shortages, business input hikes on parts and consumables prices as well as increasing overheads, in the form of escalating rents or mortgages and of course fuel bills.

“It’s a turbulent time for many UK businesses,” added Lindley. “So being able to quickly check your experience against an industry average is of more use right now than ever before.”

It is unlikely that rising labour rates are simply driving customers away, however.

“Motorists are feeling pressure on household budgets so there may be an element of delaying work,” said Lindley. “However, we think the primary causes of this drop are first, the end of the year is traditionally slightly quieter and secondly, bookings still vary to the pattern embedded by the six month MOT extension.”

This ‘Covid effect’ from March 2020 is reducing over time but Garage Industry Trends shows a clear pattern; a rise in future bookings was seen ahead of a plateau from September 12 to  October 30 which has since been reducing.

The automotive sector's 20-year high vacancy rate has led to increased demand and greater salaries, research completed by the Institute of the Motor Industry (IMI) has found.

The IMI's Automotive Job Postings Briefing showed the current vacancy rate (number of vacancies per 100 employees) for motor trades is 3.8, representing 20,000 vacancies – slightly below the national rate of 4.1% for all industries.

The rate increased during 2021 and remained at record levels into 2022, although the rates have dipped slightly in the past two months.

Marketing Delivery have urged dealers to combine MOT and vehicle service alerts to help maximise aftersales conversions.

It follows after a new survey commissioned by the company revealed that 77% of UK motorists would be more likely to book their car into a workshop that found a way to a way to combine MOT and service work into a single visit.