Rising spending in Maine shows that economic slowdown may have been averted

By Lori Valigra, Bangor Daily News Staff

Mainers bought more items early this spring from cars to household goods, a positive indicator that the country may have avoided the economic slowdown many thought was coming.

Consumer confidence was up in July to its highest level in two years across low- and high-income earners, reflecting current economic conditions and expectations, according to The Conference Board. That is a turnaround from the mostly diminished consumer sentiment last year, when worries about a possible recession and inflation-based price rises persisted. U.S. Census data in June showed a key area of purchasing, U.S. retail and food services, were also up — a rise of 1.5 percent from a year ago.

Maine sales tax data confirms the national trend that consumers are spending money. Total sales taxes for May, which reflect purchases, were up 3.3 percent from the previous year and up more than 15 percent from April, according to Maine Revenue Services. 

General merchandise sales taxes at large department and discount stores were up 9.6 percent from April to May. Sales taxes at specialty retailers including drug stores, pet shops and bookstores were up 15.6 percent from April to May and automobile sales taxes were up 12 percent from April to May.

That’s good news for John Reny, owner of the 17 Renys retail stores — including one in Dexter — with more than 500 employees across Maine. Sales so far this year are up almost 5 percent compared to last year.

“I was a bit worried this year that people weren’t going to have so much disposable income because the government stopped giving people free money,” Reny said, referring to pandemic payments that stopped at the end of 2021. “Our sales are up from last year, which was one of the best years we’ve ever had.”

Reny said business typically increases each month starting at the beginning of the year, culminating with strong late-summer and holiday sales.

“The big numbers are still coming,” Reny said. “November and December should have huge numbers.”

It is great to see the monthly increases so early in the year, said Curtis Picard, president and CEO of the Retail Association of Maine, but he places more emphasis on annual increases and sales trends. Inflationary price increases also have played a role in higher sales taxes, although some businesses have held off price increases as long as they could.

“I do think that the low unemployment rate has been beneficial,” he said. “Those people with jobs feel more comfortable about spending, and that is helping keep this economy rolling.”