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Restaurant performance improves; Project delays weigh on construction hiring

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Restaurant performance improves

U.S. restaurant performance improved for the third straight month in May, though operators remain concerned about future consumer spending with the full effects of trade tariffs still to be seen, according to the National Restaurant Association’s latest survey. The industry has dealt with multiple store closings, job cuts and bankruptcy filings during the past year.

“A majority of restaurant operators reported higher same-store sales in May, while customer traffic readings also improved from recent months,” the Washington, D.C.-based trade group said in a statement Monday. “However, operators’ outlook for sales in the months ahead remains uncertain, while their assessment of the overall economy is considerably less bullish.”

The group’s latest overall restaurant performance index, based on several factors, posted at 100.1 in May, up slightly from 99.7 in April. Numbers above 100 indicate key metrics are in a period of expansion and those below 100 signal contraction. But just 20% of operators said they expect economic conditions to improve in six months, down from nearly 50% in the November and December surveys of 2024.

A separate index gauging operators’ six-month future outlook for industry conditions posted at 99.9 for May, down 0.2 percentage points from the prior month. The trade group said 49% of surveyed operators reported making a capital expenditure for equipment, expansion or remodeling during the prior three months, essentially unchanged from surveys of the past five months.

Project delays weigh on construction hiring

Only half of the nation’s metropolitan regions posted year-over-year construction gains in May, as project owners paused or canceled work due to tariff and other policy uncertainties, according to the Associated General Contractors of America. This underscores recent data showing overall construction spending declining from a year earlier.

Citing government data, the trade group said construction jobs rose on an annual basis in just 180 out of 360 tracked regions, the fewest since March 2021. “This appears to support other indications that investors and developers are delaying or canceling planned projects until they know how severely they’ll be affected by evolving tariff and workforce policies,” Ken Simonson, the association’s chief economist, said in a statement Monday.

For the third straight month, the Arlington, Virginia, region added the most construction jobs from the year earlier at 8,000 for a 9% gain. It was followed by the Cincinnati region at 5,400 or 10%, and the Washington, D.C., area at 4,900 or 10%.

The group said construction employment declined for the year in 121 metropolitan regions and was unchanged in 59 areas. The steepest drop was in Southern California’s Inland Empire at 6,200 for a 5% decline, followed by Los Angeles’ decrease of 5,100 or 3%, with New York’s Nassau-Suffolk County region down 4,300 or 5%.

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