The recession challenged the industry, with consumers cutting back on discretionary purchases like manicures and hair services. With the economy on the mend, salons will experience growth again, aided by a rise in disposable income and consumer sentiment. Hair and nail salons can benefit by taking advantage of growing interest in eco-friendly products and abiding by new regulations The Hair and Nail Salons industry has a low level of capital intensity. This is similar to other personal service industries, which are labor-intensive. In 2012, for every $1 spent on wages, operators will typically require an estimated $0.04 of capital investment. As a personal service industry, the industry relies heavily on labor, and there are not many opportunities for increased mechanization. Capital intensity declined over the past five years, when $0.05 of capital investment was required for every $1 spent on labor. The change has mainly occurred because companies decreased their capital expenditures during the recession to cut operating costs.
