Chile's manufacturing sector experienced a significant downturn in May, with production falling 7.2% compared with the same month a year earlier, the national statistics agency INE said on Tuesday. The agency described the contraction as the steepest recorded since November 2022.
The decline surpassed the consensus among economists surveyed, who had forecast a milder 2.5% year-on-year decrease for May. The gap between the actual outcome and expectations highlights stronger-than-anticipated weakness within key manufacturing subsectors.
Food manufacturing was the primary contributor to the downturn, registering a 10.9% drop year-on-year. INE attributed much of this fall to a reduction in fish production. Officials said the weakness in the fishing sector was linked to adverse weather conditions that constrained biomass availability in traditional fishing zones.
Mining-related output also deteriorated during the month. Chile, which is the world producer of copper, saw copper production decline 12.9% year-on-year to 423,623 metric tons in May, according to INE's release. That shortfall in copper output added to the overall manufacturing contraction.
The combination of a marked slowdown in food processing - particularly fisheries-related production - and a sizable fall in copper output produced a broader weakening in the country's manufacturing figures for the month. INE's data indicate specific sectoral drivers behind the headline number rather than a uniform decline across all industrial activities.
INE's report provides a detailed snapshot of May's production flows but does not include projection or policy reaction in its release. The statistics highlight two materially affected subsectors: food manufacturing, with emphasis on fish production, and copper mining. Observers and market participants will likely monitor subsequent releases to see whether these trends persist.
Summary
INE reported a 7.2% year-on-year decline in Chilean manufacturing production for May - the largest drop since November 2022. The fall exceeded economist expectations of a 2.5% decline and was concentrated in food manufacturing, led by reduced fish catches due to adverse weather, and a 12.9% fall in copper output to 423,623 metric tons.