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UPDATE 1-Chile factory output weakest in over six years on volcano effect
November 29, 2016 / 1:20 PM / a year ago

UPDATE 1-Chile factory output weakest in over six years on volcano effect

(Recasts, adds detail from statement, background)

SANTIAGO, Nov 29 (Reuters) - Chilean manufacturing production plunged 6.9 percent in October from a year earlier due in large part to lingering effects of the 2015 Calbuco volcano eruption, the government said on Tuesday in the weakest monthly reading since March 2010.

Output was far below a Reuters poll that estimated a 0.9 percent rise.

Natural disasters were the key factor in October, as in 2010, when the country was recovering from a devastating 8.8 magnitude earthquake.

In April 2015, the Calbuco volcano erupted in southern Chile, scattering ash over a wide area and leading to widespread losses in the country’s salmon industry, the world’s second-largest after Norway.

That loss of biomass triggered a reduced salmon harvest last month that also hurt the plastic industry due to reduced demand for bags from fisheries, government statistics institute INE said.

“The number is surprising, but it is not so strange that the food sector has this effect, because it carries a lot of weight in the indicator,” said EuroAmerica economist Luis Felipe Alarcon.

Copper production in the world’s top exporter fell 11 percent in October after a series of stoppages, and nitrate output was also down.

Calendar effects also played a role, with two fewer working days leading to lower output. (Reporting by Rosalba O‘Brien and Felipe Iturrieta; Editing by Lisa Von Ahn)

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