New statistics are tracking how much Mainers spend, and the news isn’t good for their bank accounts.
Mainers spent more than the national average on goods and services ranging from gasoline to groceries to health care in 2012, according to data released Thursday by the federal Bureau of Economic Analysis. Nationally, Maine ranked 13th in consumer spending and 32nd in median household income.
It’s the first time the bureau has released consumer spending figures on the state level. The data covers 16 categories of goods and services, from food and cars to health care and recreation. The figures are based on an aggregate of consumer spending divided by the number of residents.
In 2012, the most recent year covered by the data, Mainers spent $38,677 per person, compared with a national average of $35,498. Mainers’ spending ranked fifth among the six New England states, outpacing only Rhode Island, although New England was the top-spending region in the country by a significant margin, at $44,549 per capita.
The state’s median household income was $48,219 in 2012, according to the U.S. Census Bureau, compared with $53,046 for the United States.
In general, all that spending can have some positive aspects, because about two-thirds of the country’s economy is driven by consumer spending. But in a relatively low-income state, it probably means that many Mainers are cutting back or forgoing savings, said James Breece, an associate professor of economics at the University of Maine.
“Mainers can’t afford to save money,” Breece said, which poses economic risks down the road as more residents of the state reach retirement age and need to start dipping into whatever nest eggs they’ve put together.
Many of the figures in the data make sense, Breece said, including that Mainers spend more per capita on health care – $6,937 in 2012 versus $5,885 nationally. As the oldest state in the country, Mainers are probably heading to the doctor’s office a lot more often than younger, and likely healthier, residents of other states, he said.
Mark Lapping, a distinguished professor at the University of Southern Maine’s Muskie School of Public Service, is not surprised by another piece of data, which shows that Mainers spent $3,526 per capita on what the Bureau of Economic Analysis calls “food and beverages for off-premises consumption.” Mainers’ spending in the category, which primarily encompasses groceries, was sixth-highest in the country and well above the national average of $2,750.
Maine is more dependent than any other state in the region on food coming in from outside, Lapping said, and food that needs to be transported greater distances costs more. He said most of the food on store shelves in Maine is also processed elsewhere, and that means more of the price paid at the register ends up out-of-state.
“That’s capital that leaves Maine and works somewhere else,” Lapping said. A greater effort to grow and process more food in-state, he said, would boost the economy by keeping that cash flowing to farmers and suppliers in Maine communities.
Another category where Mainers had to dig deeper was for gasoline and other energy, which includes items such as heating oil, propane and kerosene. Maine ranked behind only three Northern Plains states in spending, with $2,374 spent per capita versus a national average of $1,328.
But Mainers spent less than national averages on some categories, including housing and utilities; clothes and shoes; and financial services and insurance.
The federal data released Thursday was calculated back to 1997 for comparison purposes, and it showed that Mainers, like most Americans, sharply reined in their spending when the financial crisis and recession hit in 2008 and 2009.
Spending had regularly grown by 6 percent or 7 percent a year in the late 1990s and early 2000s, the figures show, but then started to taper off. In 2008, as the recession took hold, spending growth fell sharply to 2.1 percent, and then to just 0.4 percent the next year. Many states saw declines in spending in 2009, and nationally there was a drop of 1.6 percent.
Spending in Maine has since rebounded somewhat, but grew just 2.8 percent in 2012. The regional average increase was 3.1 percent, and spending grew nationally by 3.3 percent in 2012.
Nationally, the 2012 leader in spending was the District of Columbia, at $59,423, followed by Massachusetts, Connecticut and North Dakota. Spending was lowest in Mississippi, at $27,406 per capita.