Reuters reported that Chilean manufacturing production surged in October beating expectations and posting its biggest annual gain in 2012 on the back of extra working days and a pick up in already buoyant domestic demand.
The government said that manufacturing output leapt a seasonally adjusted 19.7% in October from September. It also grew a stronger than forecast 9.1% from a year earlier. October had five more working days than a holiday packed September in Chile fueling the leap in manufacturing.
Of the 9.1% jump the INE statistics agency said that at the local level, manufacturing production was favored by a positive calendar effect, with three more working days versus October 2011 and also by an increase in domestic and external demand for various products, strongly highlighting increased production of food and beverages.
Following the data releases, Finance Minister Mr Felipe Larrain said that while exports overall fell in the Q3 that investment and consumption are pushing the Chilean economy forward.
Export dependent Chile has so far fared better than expected amid fears of a slowdown on the back of slowing demand from top trade partner China. The Andean country's economy expanded 5.7% in the Q3 from a year earlier.
Easy access to credit in Chile and a growing retail industry have gone hand in hand with a surge in domestic demand in the Andean country, as in much of Latin America.
A Reuter's poll had seen manufacturing output in October rising 2.7 percent from a year earlier. Chile produced 476,202 tonnes of copper in October, a 1.4% rise from the same month a year earlier on improved mineral ore grades and increased production at some of the nation's new mines, the government also said on Thursday.
World No.1 copper producer Chile is struggling with stubbornly dwindling ore grades in many of its aging, tired deposits though new and expanded deposits have helped increase output this year. Compared with September, output of the metal grew 2.6%. Copper production expanded 3.8% to clock 4.46 million tonnes between January and October compared with the year earlier period.
Mr Joaquin Vial Central bank board member said that strong economic growth in emerging countries boded well for copper demand in coming years. But there is considerable uncertainty about the short and medium term outlook. In the short-term due notice must be taken to the very unusual pattern of the current cycle.
Supply has taken far more than normal to respond and consumption will remain weak over the next year. Analysts have called into question Chile's aim of producing 5.4 million tonnes of copper this year deeming it overambitious.
