NRA’s Performance Index Tips Back Into Positive Territory

Improved sales and traffic and a significant increase in operator optimism pushed the National Restaurant Association’s Restaurant Performance Index back into positive territory in September. From May through August, the index had lagged below the 100 level that signals contraction versus expansion. The index moved above 100 in March and April for the first time since November 2007.

Seven of the eight components of the index were positive in September. In the Current Situation Index, which gained a half-point, same-store sales jumped 1.1 point and traffic moved 0.7 point higher. The labor component also rose. Only the measure tracking operators that made a capital expenditure was down, off 0.3 point. The percentage of operators reporting such a purchase during the past three months fell to 42% from 44% in August.

All components of the Expectations Index were higher, pushing that index up a full point. The percentage of operators that believe economic conditions will be better in six months jumped to 38% from a meager 25% in August, while those thinking things will get worse fell to 16% from 21%. The changes pushed the component for business conditions up 1.8 point.

The increased optimism also applied to those planning to make a capital purchase during the next six months. The percentage planning such buying rose to 47% from 42% in August and the measure rose a full point.