The monthly index, which measures the health and outlook of the restaurant industry, dropped due to lower sales and traffic levels as well as restaurant operators’ discouraged views of the economy.
“Most notably, restaurant operators’ outlook for the economy fell to a five-month low, with only 23% of operators expecting business conditions to improve in the next six months,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the restaurant association in a news release.
Although declining, the index remained above 100 for the fifth straight month.
According to the measurement standard of the Restaurant Performance Index, numbers above 100 mean the industry is expanding, while values below 100 mean it’s contracting. The index is a combination of the Current Situation Index, which came in at 101.1 for July, and the Expectations Index at 101.3 in July.
Each measurement fell in comparison to previous months but the index remains high because restaurant operators returned positive capital spending levels. Their expectation index categories also remained above 100 for the seventh consecutive month, indicating operators are generally optimistic about business conditions in the near future.
Restaurant staffing does not appear to be tapering either. In the next six months, 23% of operators plan to increase staffing levels while only 10% plan to cut positions.