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New PBA Performance Index Shows Industry Expansion
Posted: October 30, 2009
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The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), stood at 99.1 in the third quarter—down 0.6 percent from its second quarter level of 99.7. The Current Situation Index has remained below 100 throughout 2009, which represents contraction in the current situation indicators.
For the first time in 2009, salon/spa owners reported a net increase in service sales, meaning more owners reported higher sales than lower sales. Thirty-eight percent of salon/spa owners reported an increase in same-store service sales between the third quarters of 2008 and 2009, while 36% reported a sales decline.
Although salon/spa owners reported an improvement in service sales in the third quarter, they continued to report soft retail sales. Forty-seven percent of salon/spa owners reported lower retail sales in the third quarter while 36% of salon/spa owners reported higher retail sales between the third quarters of 2008 and 2009.
The Expectations Index, which measures salon/spa owners' six-month outlook for five industry indicators (service sales, retail sales, employees, capital expenditures and business conditions), rose 0.7 percent in the third quarter to a level of 104.6. The Expectations Index remains well above 100, which indicates that salon/spa owners are optimistic about industry growth in the months ahead.
Third quarter growth in the Expectations Index was driven by growing optimism for both service and retail sales in the months ahead. Fully seven out of 10 salon/spa owners said they expect to have higher service sales in six months compared to the same period in the previous year. Only 8% of salon/spa owners expect their service sales volume in six months to be lower than it was during the same period in the previous year.