The COVID-19 pandemic has already changed the spending habits of most Americans. Nearly every sector in the US economy has been impacted by COVID-19, including the $50 billion a year collision repair industry. And although the recession has allowed some shops to catch up on backlogs and fill job vacancies, others are getting squeezed as people drive less and tighten their budgets. What follows are some ways that COVID-19 may be affecting the bottom line of the average collision repair shop near you.
Auto Shops Remain Open
Since they are classified by the government as “essential” businesses, auto body and glass repair shops can still-remain open when other businesses can’t. CollisionWeek (CW) recently surveyed collision repair facilities across the US to determine how their business has changed over the past month and to get their economic projections for the rest of this year. Fortunately, CW discovered that 100% of the shops they contacted were still open for business.
Car Businesses is Down in these States
However, 78% of shop respondents reported to CW that their sales had declined since the government first announced travel restrictions to slow down COVID-19’s spread. Only 9% of those shops surveyed indicated that their sales had increased over the past few weeks.
CW learned that the states where business had declined the most were those that had implemented shelter-in-place orders early on, including Pennsylvania, California and New York. In fact, several respondents in those states mentioned that the number of repair jobs involving insurance claims had dropped dramatically due to stay-at-home orders and fewer traffic accidents.
Some Car Shops Are Downsizing
The US collision repair industry employs over 350,000 workers nationwide. Eventually, most body shops will no doubt feel the financial impact of the COVID-19 recession. But when asked by CW if they had recently laid-off workers due to declining business, only 18% of respondents said “yes”. And, most of the shops that had done so we’re in the same three states listed above.
Supply Chain Disruptions For Collision Repair Shops
Collision repair shops also rely upon automotive parts manufacturers to supply them with both after-market and OEM parts. But a lot of parts factories have been forced to temporarily close due to COVID-19, including those in China.
As a result, nearly half of all respondents in the CW survey reported that they were experiencing supply shortages, with OEM parts being the hardest to obtain. Over 15% of respondents also mentioned that they were having trouble getting some of the paint supplies and other materials they needed.
For safety reasons, body shop technicians are also required to wear N95 masks and other personal protective equipment (PPE). Due to the emergency reallocation of PPE to healthcare workers and first responders, some shops are also having a hard time purchasing enough PPE.
What Does the Future Hold For Auto Repair Shops?
CW also asked respondents to make business predictions for the next two months- specifically how long they could stay afloat if the COVID-19 crisis persists. Eight-out-of-ten shops felt confident that they could weather the financial storm even if it lasts for a while, with only around 9% indicating that they would be forced to close their doors for good.
When asked by CW if they were confident that business would return to normal during the second half of 2020, a vast majority of survey respondents indicated that they thought it would.
Over at CCC, a leading information services provider for the collision repair industry, they are also optimistic about the future of their clients. According to a recent article posted on CCC’s website, some industry insiders believe that COVID-19 will only cause a minor ripple in the collision repair sector, resulting in a temporary hiring slowdown in some states.
But given that there’s already a shortage of technicians in the collision repair field, that may give the average shop a chance to catch up as new tech school graduates become available.
Promptly Find Local Collision Repair Shops Here
Even with fewer drivers on the road due to the COVID-19 pandemic, accidents still happen. When your ride’s been dinged up, promptly take it to one of the 19,000+ auto body and glass repair shops listed in the nationwide Carwise referral network. Once you do, I-CAR and ASE-certified collision repair professionals will promptly go to work restoring your vehicle like new again while putting your mind at ease.
Search your zip code now for a customer-reviewed auto body or glass repair shop nearby: www.carwise.com.