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.”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.