The cost of living is continuing to increase on the Island with Bermudians spending more on food, health care, education, life insurance and pensions according to latest Government figures.

The Ministry of Finance 1999 Economic Review states that consumer expenditure grew six percent for the year 1998 to 1999 compared to the year before.

Last year the figure reached $1,583.2 million in this period compared to $1,494.0 the year before. Five years ago in 1994/5 it stood at $1,326.7 million.

The figure for last year adjusted for inflation, shows an increase of 4.5 percent.

According to the Government more jobs and higher pay on the island have left residents with more money to spend.

The document said: "Expanding employment income supported growth in consumers expenditure.'' This employment income is estimated from the Tax Commissioner's records, not the payroll tax, and rose in the first three quarters of 1999 by eight percent over the same period in 1998 to reach $1,166.8 million.

"Higher employment income is derived from a combination of greater numbers of employed people and higher renumeration,'' the report said.

The largest components of consumer expenditure are housing (24 percent), food (13.9 percent) and household goods, services and supplies (15.3 percent).

Other factors used to make up the figures are alcoholic drink and tobacco (2 percent), clothing, accessories and footware (4 percent), fuel and power (3 `Cost of living rises' Transportation (7 percent), education (5 percent), foreign travel (6 percent), medical, health and personal care (5 percent), entertainment and recreation (4 percent), government transfers (5 percent) and other items makes up the final total.

The fastest growing segments of personal consumption, given as a percentage increase over 1998 are education 9.4 percent, food and non-alcoholic beverages 9 percent and life insurance and pension funds 8.8 percent.

Government transfers for education and health made on behalf of the consumers, expanded by 11.5 percent. The Retail Sales Index was also used to help calculate the rise in personal consumption. The Government publication states: "The Retail Sales Index provides a valuable insight into the consumption patterns of consumers in 1999.

"The index is based on a sample of stores representing different segments of the retail sector that are estimated to represent 66 percent of total retail sales in Bermuda. The index acted erratically in 1999 with months of rapid expansion interspersed with months of very little growth.

"After adjusting the index for inflation, several months registered a decrease in sales when measures against the same month in 1998.'' Sales performance varied dramatically between segments of the retail sector.

Stores that sell a high proportion of their goods to tourists experienced a flat or declining sales due to the lower number of tourists that visited Bermuda in 1999. Shops specialising in clothing and clothing accessories sold into generally flat markets with several disappointing months. Motor vehicle dealers experienced strong demand for their goods and were challenged at times to keep adequate inventory on hand. Food stores also reported generally strong sales over the course of the year and hardware stores registered strong sales during most of the year reportedly due to the strong construction industry. On average appliance, furniture and pharmaceutical stores posted only modest increases in sales.

During the period of January to October 1999 residents returning form trips abroad declared goods valued at over $35 million, 13.1 percent higher than in the same period in 1997. In 1994 the figure stood below $26 million.

The declared overseas purchases during the year to October are equal to 5.4 percent of the estimated gross turnover in the local retail sector over the same period. The value of goods declared by returning residents doesn't include the significant and growing amount of shopping done on the Island by mail order or on the Internet.

The report said: "Retailers in Bermuda are becoming increasingly concerned bout heir ability to maintain their share of consumer expenditures. Retailers are struggling to develop strategies to remain profitable in the face of the increasingly competitive overseas trade.'' CHART `COST OF LIVING RISES' -- COMPONENTS OF PERSONAL CONSUMPTION CONSUMER EXPENDITURE