NRA’s Performance Index Swings Back Down In March; Cap-Ex Measures Mixed

It’s down, it’s up, it’s down. Restaurant operators surveyed for the National Restaurant Association’s monthly Restaurant Performance Index have been on a roller coaster since December last year. The index showed another steep decline in the March survey, conducted in April. It fell 1.4 point to 100.7. The Current Situation Index dropped 2.6 points to 100.2 as current same-store sales and traffic plunged by 4.2 and 5 points respectively.

Any reading for the index and any of its components above 100 signals continued expansion. With the exception of December 2015, the overall RPI has remained above the tipping point since March 2013.

Both capital spending indicators in the RPI remained in positive territory, and the future-looking cap-ex marker was the sole RPI component to rise.

"With the exception of February which was bolstered by Leap Year, the RPI told a generally consistent story in recent months," stated NRA Chief Economist Bruce Grindy. During the first quarter, “same-store sales and customer traffic readings were a mixed bag, while restaurant operators remained cautiously optimistic about business conditions in the months ahead. Barring any external shocks, this likely points toward the continuation of a moderate business environment during the remainder of 2016," Grindy added.

The four-component Expectations Index fell only 0.2 point in March to 101.2, bolstered by a rise in capital spending plans during the next six months. The other three indicators in the Expectations Index were slightly negative. The future-looking indicator rose 0.6 point to 101.9, as 59% of those surveyed said they plan spending for equipment or facilities improvements, up from 56% who responded similarly in the February survey.

The component of the Current Situation Index that tracks restaurateurs’ capital spending during the past three months fell 0.4 point to 101.9. The 59% of March survey respondents who reported they made a purchase was down from 61% in the February survey. Still, the reading marked the 18^th consecutive month a majority of those surveyed have made a capital purchase.

The complete Restaurant Performance Index can be found at restaurant.org. “””