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PBA's Salon & Spa Performance Index Hits Lowest Level in Two Years
Posted: December 2, 2011
The Professional Beauty Association's (PBA) three main tracking indices for the salon/spa industry, which include the Salon & Spa Performance Index (SSPI), Current Situation Index and Expectations Index, continued to decline in the third quarter of 2011 and hit their lowest levels in two years. The SSPI, which is the main index of the three, is a quarterly composite index that tracks the health and outlook of the U.S. salon/spa industry. The SSPI declined 1% from the second quarter of 2011 to stand at 101.9 in the third quarter. This is the second consecutive quarterly decline and a 1.3% drop compared to the third quarter of 2010.
Combined with quarterly drops in the Current Situation Index and Expectations Index of 1.1% and .9% respectively, these results are not positive for the industry and potentially the broader economy. Nonetheless, all indices remain above a base level measurement of 100, which is still considered positive.
"While the third quarter is typically slower for many salons and spas due to the summer holiday season, the trend results from the Salon & Spa Performance Index are discouraging. The PBA continues to increase our array of business education in order to help owners through these challenging times and better position themselves for the future," said Steve Sleeper, executive director for the PBA.
The SSPI is based on responses to PBA's "Salon & Spa Industry Tracking Survey," which is fielded quarterly among salon/spa owners nationwide on a variety of indicators. It is constructed so that the health of the salon/spa industry is measured in relation to a steady-state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction. The Index consists of two components - the Current Situation Index and the Expectations Index.
The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours, and capital expenditures), fell to 100.3 in the third quarter - down 1.1% from the second quarter 2011. All five of the indicators declined with sales and customer traffic registering the sharpest drops. While still slightly above the baseline of 100, consecutive quarterly declines show erosion in consumer spending levels with regard to beauty purchases and the broader economy. Labor indicators were mixed in the third quarter, with salon/spa owners reporting a net increase in staffing levels, but a decline in employee hours.