UK labour rate study shows garages provide outstanding value for money and calls on workshop owners to properly calculate costs
The cost of labour at UK independent garages is falling behind inflation and owners are seeing diminishing returns year on year, the Independent Garage Association has said after it published the findings of its latest garage labour rate study.
The research shows that many garages are absorbing increases in the cost of labour, technological investments and access to technical information.
The IGA warns such practice is unsustainable and is calling on garage owners to ensure all costs are built into their charging structures.
Stuart James, IGA chief executive, said: “The study clearly shows that in many cases, independent garages have been absorbing the rising costs involved with running a garage business, rather than passing those increases on to their customers.
“While this is great news for their customers, it is impacting on garage profit margins year-on-year, which in the long-term is not sustainable.
“In these difficult times, it is more important than ever for garages to build all ongoing costs into charging structures to future-proof their businesses.
“A significant number of members have taken part in this study and feedback indicates that they will use this to review their charge out rates, so they can make a sustainable margin and continue to provide their vital services to local communities.”
Average independent garage labour rates
The study findings, based on a survey of 3338 independent garages from across the UK, show that throughout the average labour rate charged by independent garages in 2020 is £47.47.
The National average for England is £47.90, for Scotland £45.52, for Wales £40.61 and for Northern Ireland £40.55.
The highest regional cost is in the M25 Interior region, with an average hourly labour rate of £55.48.
The IGA compared 2020 labour rates with findings from its earlier 2012 study and compared changes in electricity and insurance costs over the same period.
It found that the overall national hourly labour rate has increased by just £5.88 – 6.7 per cent below the UK rate of inflation, which has risen by an average of 2.5 per cent per annum between 2012-2020 as stated by the Bank of England.
The UK independent garage labour rate study was carried out by the IGA over the past twelve months to provide its members with a reference tool to establish whether their labour rate is comparable with other garages in their vicinity.
The IGA has also developed a ‘labour rate calculator’ to help members to review their costs and work out an approximate breakeven hourly rate.
Members will receive a hard copy booklet of the study over the coming days.
For further information about the IGA, click here.