The outlook for the restaurant industry grew more optimistic in June, as the National Restaurant Association’s comprehensive index of restaurant activity posted a moderate gain. The Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.4 in June, up 0.5 percent from May and its first gain in three months. In addition, the RPI remained above 100 for the 50th consecutive month, which represents expansion in the Association’s composite index of eight key industry indicators.

“Growth in the Restaurant Performance Index was driven by an improvement in same-store sales and customer traffic in June,” said Hudson Riehle, senior vice president of Research and Information Services for the Association. “In addition, restaurant operators’ outlook for the overall economy rose to its highest level in three months, with plans for capital expenditures also remaining strong.”

The RPI is based on the responses to the National Restaurant Association’s Restaurant Industry Tracking Survey, which is fielded monthly among restaurant operators nationwide on a variety of indicators including sales, traffic, labor and capital expenditures. The Index consists of two components – the Current Situation Index and the Expectations Index.

The June increase in the Restaurant Performance Index was fueled by a solid increase in the current situation component of the index. The Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 101.0 in June – up 0.8 percent from May and its strongest level in three months.

Restaurant operators reported positive same-store sales for the fourth consecutive month in June. Fifty-six percent of restaurant operators reported a same-store sales gain between June 2006 and June 2007, up from 47 percent who reported a sales gain in May. Twenty-nine percent of operators reported a same-store sales decline in June, down from 36 percent who reported similarly in May.

Restaurant operators also reported an improvement in customer traffic levels in June. Forty-three percent of restaurant operators reported an increase in customer traffic between June 2006 and June 2007, up from 39 percent who reported similarly in May. Thirty-seven percent of operators reported a traffic decline in June, while 20 said their customer traffic levels were about the same as they were in June 2006.

Restaurant operators continue to make capital expenditures at a healthy rate. Fifty-three percent of operators said they made a capital expenditure for equipment, expansion or remodeling during the last three months, matching the solid level reported last month.

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 101.7 in June – up 0.2 percent from May and its first gain in three months.

Restaurant operators are slightly more optimistic about sales growth in the coming months. Fifty percent of restaurant operators expect to have higher sales in six months (compared to the same period in the previous year), up from 47 percent who reported similarly last month. Only 15 percent of restaurant operators expect their sales volume in six months to be lower than it was during the same period in the previous year.

In addition to their positive expectations for sales growth, restaurant operators are somewhat more optimistic about the direction of the overall economy. Thirty-one percent of operators expect economic conditions to improve in six months, up from just 25 percent who reported similarly last month. Eighteen percent of operators said they expect economic conditions to worsen in six months, while 51 percent expect economic conditions to remain about the same.

A majority of restaurant operators are planning to make new capital expenditures in the coming months. Fifty-nine percent of restaurant operators plan to make a capital expenditure for equipment, expansion or remodeling in the next six months, matching the solid level reported similarly last month.

While the RPI is consistently released on the last business day of each month, more detailed data and analysis can be found on Restaurant TrendMapper (www.restaurant.org/trendmapper), the Association’s subscription-based Web site that provides detailed analysis of restaurant industry trends.