Restaurant Current Situation Index Reaches Highest Since July 2007

by: Mark J. Perry

National.Restaurant Association -- Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April. The National Restaurant Association’s Restaurant Performance Index (NYSEMKT:RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.9 in April, essentially unchanged from a level of 101.0 in March. In addition, April represented the 5th consecutive month in which the RPI stood above 100, which signifies expansion in the index of key industry indicators.

The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 100.3 in April – up slightly from a March level of 100.2. In addition, the Current Situation Index stood above 100 for the 2nd consecutive month, which signifies expansion in the current situation indicators (see chart above).

The Expectations Index, which measures restaurant operators’ six-month outlook for four industry indicators (same-store sales, employees, capital expenditures and business conditions), stood at 101.5 in April – down from a level of 101.7 in March. The Expectations Index stood above the 100 level for the 9th consecutive month, which signifies expansion in the forward-looking indicators (see chart above).

At 100.3, the Current Situation Index in April was at the highest level since July 2007, almost four years ago. It's also the first time since the summer of 2007 that the Current Situation Index has remained above the benchmark 100 level, which signals expansion of restaurant activity.