Foodservice Equipment Reports

Cap Spending Measures Fell Sharply In NRA’s December Performance Index

The two indicators in the National Restaurant Association’s Restaurant Performance Index that track recent and future capital spending by restaurant operators took big hits in December, even as other measures in the index rose, pushing up the overall index by half a point. It now rests at 99.9, just shy of the 100 level that separates contraction from expansion. The December reading was the second consecutive month the index was below 100, after spending 14 months in expansion territory.

Strong gains in current same-store sales and traffic and anticipated same-store sales overcame the falling cap-ex indicators. The marker for current same-store sales jumped 2.1 points while the traffic indicator rose 1.9 points. The indicator for future same-store sales was up 1.3 points. And operators, whose expectations for future business conditions plummeted by more than 2.3 points between September and October, were slightly more optimistic in November.

But worries about the American economy in light of the fiscal cliff fight last month appeared to lead operators to pull back on current and planned spending for equipment and facilities. The indicator tracking capital spending during the past three months fell 1.8 points while the planned spending marker was off a full point. Only 37% of operators reported a cap-ex buy in December, the lowest level in 32 months. The percentage of operators planning to make a capital purchase during the next six months fell from 50% in November to 45% last month.

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