FREDERICTON – New Brunswickers spent more money in 2007 than the previous year, although the largest increases focused on taxes, shelter, alcohol and tobacco.

 

A recent Statistics Canada study on household spending suggests New Brunswickers increased their spending by 7.6 per cent in 2007, trailing only Saskatchewan‘s increase of 7.7 per cent.

 

Although the increases are higher than inflation, economists say it’s unknown whether the improved spending is due to more disposable income or higher costs.

 

“If you’re spending more on housing, your worry is going to be is it reflecting an increase in the cost of housing?” said Charles Cirtwill of the Atlantic Institute of Market Studies.

 

“Any category where the gap is bigger than three or 3.2 per cent is a significant move. You want to see an increase in consumption of recreation and consumer goods. Consumption in durables, (such as) cars and homes, tend to indicate a more sustainable economic bump.”

 

Spending on shelter increased by 10.3 per cent from $9.093 to $10,031, spending on tobacco and alcohol jumped by 14.4 per cent from $1,246 to $1,426, and spending on personal taxes jumped 10.6 per cent from $9,590 to $10,610.

 

“That’s the kicker,” Cirtwill said of the tax increases. “Of all the spending numbers, that’s the one you definitely don’t want to see going up.”

 

In 2007, the Liberals introduced across-the-board tax hikes.

 

Marc Belliveau, spokesman for the Department of Finance, said the numbers show New Brunswickers had confidence in the economy in 2007.

 

“The fact that New Brunswick performed that highly is very good,” he said, adding “it’s a very positive sign when people are so freely spending on goods and services in a household.”

 

Households spent less on furnishings and equipment, miscellaneous expenses and gambling.

Meanwhile, more money was spent on food, household operations, clothing, transportation, personal care, recreation, reading materials, education and pension contributions.