Salon/Spa Performance Index (SSPI) Records Lowest Reading in Four Quarters

The Professional Beauty Association (PBA) has released the third quarter index report (SSPI), which shows the lowest levels in four quarters. After experiencing a modest gain in the second quarter, the index declined by 1 percent from the second quarter of 2012. The index now stands at 101.9, the same reading that was recorded a year ago in the third quarter of 2011. Additionally, the related Expectations indexed registered a 0.2 percent decline, while the Current Situation Index dropped by 1.8 percent.

The PBA SSPI is a quarterly index tracking the outlook and current health of the salon and spa industry. It is based on responses to the PBA’s Salon and Spa Industry Tracking Survey, which is distributed to salon and spa owners throughout the U.S. The survey measures a broad variety of indicators to judge the health and future expectations of the salon/spa industry as perceived by salon and spa owners. A value of 100 is used as the base level, with readings above this base indicating expansion, and readings below this level indicating contraction. The full Index is derived from the Current Situation Index and the Expectations Index.

“While not experiencing dramatic swings from quarter-to-quarter, the professional salon and spa industry continues to experience volatility based in large part on consumer demand as shown in the PBA Salon/Spa Performance Index,” said Executive Director of the Professional Beauty Association, Steve Sleeper.

The Current Situation Index measures current sentiment based on five industry indicators (capital expenditures, employees hours, customer traffic, retail sales, and service sales). It fell to 99.3 in the third quarter of 2012, a 1.8 percent decline from the previous quarter and the lowest reading in nearly three years. Even with a weak U.S. economy, this is the first time in the past three years that the Current Situation Index has fallen below 100.

Every indicator in the Current Situation Index experienced declines and salon/spa owners have reported the first decrease in customer traffic in three years. Both service and retail sales were lower for many salons and spas, which is also reflected in the drop in capital expenditures and employee hours.

The Expectations Index is a gauge of salon/spa owners outlook for the coming six months regarding sales, business conditions, and expenses. This longer term outlook dropped to 104.7, a drop of just 0.2 points versus the second quarter. This strong reading over 100 indicates continued optimism for growth among salon/spa owners for the future. The small weakness in the Expectations Index was caused primarily by declining optimism regarding sales in the coming months.

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Contact :

Kathy Heshelow
Sunovis Financial