* Manufacturing output up 19.7 pct in Oct from Sept * Manufacturing output up 9.1 pct y/y, beats forecast * Retail sales grow 6.6 pct in Oct * Chile copper output up 1.4 pct in Oct to 476,202 tonnes By Antonio De la Jara and Moises Avila SANTIAGO, Nov 29 (Reuters) - 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 on Thursday. Manufacturing output leapt a seasonally adjusted 19.7 percent in October from September. It also grew a stronger-than-forecast 9.1 percent 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 percent jump, the INE statistics agency said: " 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." The INE also said that retail sales grew 6.6 percent in October versus a year earlier, similar to the preceding month's rate. Following the data releases, Finance Minister Felipe Larrain said that while exports overall fell in the third quarter, "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 percent in the third quarter 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 Reuters 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 percent 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 percent. Copper production expanded 3.8 percent to clock 4.46 million tonnes between January and October, compared with the year-earlier period. Central bank board member Joaquin Vial said in a presentation on Thursday 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," Vial said. "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. A recovery in the world No. 1 copper mine, Escondida, majority owned by BHP Billiton Ltd, as well as higher output from Anglo American Plc's disputed Los Bronces mine are boosting Chile's production. But slipping ore grades and operational problems have dented output. Production at state copper giant Codelco and world's No. 3 copper mine, Collahuasi are down year-on-year.