Restaurant Equipment Spending Plans at Highest Level in Four Years
Feb 3, 2012
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Restaurant operators are increasing their current capital expenditures on equipment, expansion, or remodeling, and their longer-term plans include even more capital spending, according to the National Restaurant Association.

The overall Restaurant Performance Index (RPI) rose sharply in December, according to the association. The RPI, a composite index tracking the U.S. restaurant industry, was 102.2 in December, up 1.6% from November to reach its highest level in nearly six years. It's the third time in four months with an RPI above 100, signifying expansion in the index of key industry indicators. The RPI consists of two components, the Current Situation Index and the Expectations Index.

Current Situation Index capital spending activity by restaurant operators continues trending upward, with 48% of operators saying in December that they made a capital expenditure for equipment, expansion, or remodeling in the last three months. This was the highest level of Current Situation capital spending activity in the last six months.

The Expectations Index in December shows that capital spending will likely increase, with 56% of restaurant operators planning to make a capital expenditure for equipment, expansion, or remodeling in the next six months, up from 47% in the November report - putting this index component at its highest level in four years.

The Current Situation Index is based on four industry indicators:
* same-store sales
* traffic
* labor
* capital expenditures

The Expectations Index measures operators' six-month outlook for four industry indicators:
* same-store sales
* employees
* capital expenditures
* business conditions

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