WRAPUP 1-Chile manufacturing output unexpectedly falls in December

Wed Jan 30, 2013 10:19am EST

* Chile December manufacturing down 2.5 percent year on year
    * Less workdays and fall in wine and chemicals output cited
    * December copper output down on ore grades, maintenance
    * Annual copper output highest since 2007

    By Antonio De la Jara and Anthony Esposito
    SANTIAGO, Jan 30 (Reuters) - Chilean manufacturing
production unexpectedly slipped in annual and monthly terms in
December led lower by fewer working days, a fall in wine
production and less output of chemicals and certain metals, the
government said on Wednesday.
    Manufacturing output fell a seasonally adjusted
2.5 percent in December from November and also dropped 2.5
percent from a year earlier, the statistics agency INE said. It
was the second time in 2012 the index fell versus the prior
year.
    "This drop is mainly due to reduced production of common
metals such as ferromolybdenum (an iron molybdenum alloy) ...
and chemical substances. Also, we observed a specific slip in
wine production," INE said. However, wood pulp output and demand
for metallic structures in mining projects remained strong in
December, the government added. 
     INE said the drop in manufacturing production had also to
do with a high base of comparison, apparently referring to
manufacturing in December 2011.
    A Reuters poll saw the manufacturing index, which is broadly
comparable to the prior industrial output index, growing 0.9
percent from a year earlier boosted by food and beverages
production. 
    "We believe the continued decoupling of supply and demand
sector data will continue to be a key element to consider in
light of the local economy's signs of overheating, which could
bring greater inflationary pressures in the medium term,"
brokerage Banchile Inversiones said in note to clients.
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