Collision Industry Survey Results Reveal Cautious Outlook

The results of the latest Bodyshop Magazine Outlook Survey reveal little enthusiasm in the field, but reason for some optimism looking ahead.

A myriad of factors combined to make the last two years difficult for the collision repair industry, a fact reinforced after polling of the industry from coast to coast by Bodyshop Magazine, Jobber News’ sister publication.

And, as noted, the numbers and the responses simply don’t warrant much enthusiasm.

While technically speaking, the recession is a distant memory, many shop owners are still feeling the effects of a dour economy. Whether it’s the result of drivers being more reluctant to report or fix small damage, insurance companies being faster to hit the write-off button, or even something as simple as weather patterns, the overall mood of the industry appears to be cautiously optimistic at best.

What’s more, shop owners continue to feel the squeeze of tight profit margins for the year, particularly as the final stages of the government’s ban on waterborne paint come into their final stages of implementation and the capital expenditures of a 2010 conversion act as an anchor on the ledger.

The annual Bodyshop Outlook Survey seems to reflect those moods. But on the positive side, when asked whether owners and managers thought 2011 would be better than 2010, a slim majority (51.7%) felt that it would be (Fig. 1). However, as is becoming common these days, there is no clear, overwhelming consensus, as the survey also showed that 48.3% felt that 2011 would be no better, or even worse, than an admittedly difficult 2010.

Perhaps more telling in terms of confidence levels throughout the industry, however, comes when the question is shifted to capital expenditures. Much like the broader consumer confidence surveys circulated by Stats Canada, shop owners’ plans to make capital investments in 2011 appear to be something of a “money where your mouth is” proposition.

As in years past, the results are conflicting. While almost half of respondents said that they predicted brighter times in 2011, only 8.6% of those who took the survey said that they would definitely be upgrading their equipment in 2011 (Fig. 2).

Now, there are a number of possible explanations for that low result, not least of which is the fact that many shops have significantly upgraded their paint equipment over the last 18 months in order to comply with the new waterborne legislation. However, over 63% of respondents say that they will either take a wait-and-see approach, or simply make do with what they’ve already got in 2011.

In the end, it appears that the collision repair industry remains in flux in the first post-recession year, and moving forward into the next decade. While attitudes certainly were not as dour in this year’s edition overall–last year, some owners suggested “quitting the business” as their strategy suggestion–this year’s crop of responses revealed some significant and lingering concerns. Employee attraction and retention remains a constant challenge; accelerating vehicle technology means continuous training demands; and when the surveys were anonymous, the opinions expressed regarding the insurance business were decidedly less cordial than during the discussion sessions at a recent CCIF meeting. However, there is also a marked sense of optimism, with owners encouraging industry colleagues to improve customer service, go the extra mile, and modernize business practices. It’s that positive outlook and constant drive for improvement that drive the industry’s potential for a rebound in 2011.

Well, that and some snow in Eastern Canada.