A national survey of collision repairers in the final two months of 2021 found well over half of shops (58%) expected their full-year sales to outpace 2020, with nearly one in five shops predicting they would end 2021 with a year over year increase of 20% or more.
However, the survey, conducted by CRASH Network, found about a quarter of shops (23%) predicted 2021 sales will fall short of their 2020 numbers, with nearly one in 10 saying they expect to be down 20% or more compared to last year.
“Parts availability and increase in total losses has pushed business down,” said one East Coast shop owner.
“We have plenty of work to increase our numbers, but not enough employees to get it completed,” said a shop owner in Oklahoma. “We are running a 10-week backlog with over 70 cars in-process.”
“Business is picking up, but now sales are limited by parts and lack of technician staff,” a Southern California shop owner concurred. “I need two body techs and another prepper in the paint shop.”
The survey found the upward trend in business optimism over the past year came to a halt in the fall. The majority (61%) said they are “not very” or “not at all concerned” about their business still operating a year from now, and that was up from 43% a year earlier, but down slightly from 64% in mid-2021.
Three in 10 of the shops acknowledged being “somewhat” concerned, up from 24% in two surveys earlier in 2021. About 10% described themselves as “very” or “extremely” concerned about their business viability, down from 26% a year ago, but unchanged from last spring.
“Inflation is going to take a huge bite out of profits,” a Massachusetts shop owner predicted, saying he was “somewhat” concerned about the shop’s future.
Still, most shops expect to make it through 2022.
“Our business is currently stronger than it’s ever been,” a Missouri shop owner said.
“This company has made it through many ups and downs since it opened in 1984,” a Wisconsin shop manager said.
“Scheduling out two months,” a North Carolina shop owner said.
An optimistic Minnesota shop manager pointed to his shop’s five-month backlog of work and “plenty of business in our area,” though he did acknowledge concern that 75% of the shop’s employees will retire within the next five to 10 years.
“Need fresh faces ASAP,” he said.
The survey found among the collision repair businesses that said they received a second-round Small Business Administration Paycheck Protection Program (PPP) loan in 2021, 70% said they have already received loan forgiveness. None of the shops surveyed reported having their loan forgiveness application rejected, but 20% said they still planned to apply to have the loan forgiven, and the remaining 10% were undecided about applying.
Among those who said they received a first-round PPP loan in 2020, 84% said the loan had been forgiven; the balance either had not applied for forgiveness, were awaiting approval or were undecided about seeking forgiveness, but again, none reported having their loan forgiveness application rejected.
John Yoswick