NRA Capital Spending Indicator Hits Another Record In October

The National Restaurant Association’s Restaurant Performance Index, which had softened in August and September, rebounded in October, as the component that tracks operators’ capital spending during the past three months reached a new record high. Of the restaurateurs responding to the NRA’s monthly tracking survey, 76% reported they made a purchase of equipment or improved their facilities, pushing the index to 105.2. The previous record was set in July when the index reached 104.3 and 72% reported a capital purchase.

The overall index rose 0.7 point to 102.1, the 32^nd consecutive month the index has stood above 100. Values above 100 signify expansion versus contraction.

The four-component Current Situation Index rose 1.2 points based on a 1.4 point increase in the same-store sales index and a 1.3 point improvement in the labor component, in addition to the cap-ex index gain. The traffic indicator was flat.

Operators expectations also improved. The Expectations Index was up 0.3 point to 101.6. The outlook for same-store sales in six months jumped 1.1 points to 103.4. And the outlook for business conditions, which has been lagging, rose 0.9 point to 100.9.

The outlook for capital spending during the next six months fell back 0.7 point to 101.8, after rising a half point in September. Of those surveyed, 59% expected to make a capital purchase, down from 62% in September.