(Feb. 11) The slowdown in the nation’s economy has the restaurant industry on edge.

The Washington, D.C.-based National Restaurant Association’s December Restaurant Performance Index, released in late January, was the lowest it has been since February 2003.

The index, which is based on monthly surveys of sales, traffic, labor and capital expenditures, was 98.7 in December, down 0.3% from November. The index is measured against at steady-state level of 100. Values above 100 indicate expansion, while values under 100 indicate contraction.

One major factor affecting restaurant growth is input costs, said Kevin Moll, chief executive officer of Denver-based National Restaurant Consultants Inc.

“Wholesale food prices are higher now than they have been at any time in the past 27 years,” Moll said. “The industry is forecasting a 5% increase.”

That, combined with pressure to provide unique items like natural and organic products and the trend toward environmental awareness — both of which increase costs — are causing major stress, Moll said.

“The average restaurant operator is on a 10% margin or less,” he said. “Some of those costs can be offset by increased menu prices, but the fact is that you can only get so much for a salad or a certain item.”

The National Restaurant Association said 15% of its RPI survey respondents cited the economy as the No. 1 challenge facing their business right now, which is up from 4% six months ago.

With the unease felt by operators, vendors could feel a hit. Moll said operators likely will be scrutinizing their financials.

“When times get tight, what you see is smaller menus, less inventory and the inventory generally turns faster,” he said. “They’re going to want smaller amounts on hand and more frequent deliveries.”

Specialties and the more fragile produce items could suffer, Moll said.

“Shelf-life of a product is critical,” he said. “Something that can handle a rougher environment has a higher value for an operator than the delicate, fragile, expensive orchids we might find on a plate.”

The belt-tightening could continue. Only 16% of the NRA’s survey respondents said they expected economic conditions to improve in the next six months and 44% of operators said they expect them to worsen.