This month's CCC Trends report will take a look at what's ahead for the collision repair industry in 2023.  There were a number of residual issues that repairers faced in 2022 that will continue to play out next year in to 2023.

These include:

1. Parts and material shortages from supply chain disruptions
2. Staffing challenges
3. New training and tooling needed to repair increasingly complex vehicles
4. Continued pressure from consumers for more digital experiences
5. And lastly, ongoing consolidation across all parts of the industry as demand for capital investment for training and equipment grows.

So, let’s dig in, starting with repair volumes.

Repair volumes continue to return to pre-pandemic levels, but as a result, capacity is being pushed to the brink. According to surveys from CRASH Network, nearly all shops reported significant increases in their work backlog, with 85 percent reporting that they are scheduling new work two weeks or more into the future.  Both the percent of shops reporting at least some backlog, and the average number of weeks of backlog continue to remain at record levels when looking back over the past six years (Figure 1).

The two biggest factors contributing to the backlog are labor shortages and parts availability.

Let’s look at the labor shortage:

According to the TechForce Foundation’s 2021 Report, the overall number of collision technicians has fallen from around 160,000 in 2016 to about 153,000 in 2020.

There are several reasons for this:

1. Baby boomers are retiring
2. More transfers and turnover are occurring
3. New positions in the industry are creating demand for over 19,000 new collision repair technicians

To compensate, shops are offering higher wages and additional benefits. This, coupled with the fact that the Bureau of Labor Statistics Occupational Outlook Handbook projects only 3 percent growth in the number of automotive body and glass repairers between 2021 and 2031 versus 5 percent across all occupations, suggests the technician shortage will continue to drag on for years to come.

Further compounding the problem is the fact that repairer productivity is lower (Figure 5) given new car complexity and parts delays, placing customer satisfaction at significant risk.

And it’s not just repair time that’s taking longer. Consumers are taking longer to report losses to their insurance company. This, combined with the average number of days between reporting a loss and the initial vehicle estimate being completed is increasing (Figure 8) as repairers and insurers struggle with capacity and a higher volume of non-driveable losses (Figure 9).

Consolidation in collision repair is also a major trend for the industry in 2023, and we see no evidence of a slowdown. More than 327 collision repair locations were acquired by the large multi-location operators in 2021.

These trends will continue into 2023, which makes understanding market conditions, vehicle repair requirements, and where to invest in training and tools even more important. Those best positioned to thrive will adapt their businesses to address the demands brought by shifting consumer and business partner expectations, vehicle technology, and employee engagement.

To learn more about trends impacting the collision repair industry, visit our website at CCCIS.com.