Independent garage labour rates rising but future bookings fall

GARAGE Industry Trends, the open real-time data platform developed by Garage Hive, reveals independent garage labour rates rising quickly.

The site went live in September and has been gathering data ever since. The growing number of opted-in Garage Hive customers generating the figures is now around 100 independent garages.

The four KPI measures provided at www.garageindustrytrends.com are averages for invoice value, Net Promoter Score (NPS), future bookings and labour rate.

“Labour rate jumps out as it is showing a consistent trend upwards,” said Alex Lindley, Director of Garage Hive. Average labour rate has risen from £66.30 per hour to £67.60, with increases in six of the seven weeks measured. This rise of £1.30 in 7 weeks will annualise to an increase of £9.70 or 14.6% by next September if sustained.

Lindley added: “We’ve got to be careful in how we interpret this data and the conclusions we draw,” said Alex. “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.

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

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 28^th November.

However, it seems unlikely rising labour rates are simply driving customers away. Lindley added: “Motorists are feeling pressure on household budgets so there may be an element of delaying work,” said Alex. “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 12^th September to 30^th October which has since been reducing.