Chile's monthly economic activity indicator, Imacec, contracted in March 2,1% compared to the same month in 2022, according to the latest report from the country's Central Bank. The indicator is located in the pessimist area of analysts' expectations who were anticipating a drop of minus 1,7% to minus 2%, following the latest reports of industrial production and commerce activity during March. This is also the second-month running contraction and the largest fall since last November when the Chilean economy collapsed minus 3,3%.
According to the bank the poor performance of March can be traced to the poor showing of the mining industry (Chile is the world's leading copper exporter and among the short list for lithium) and overall commerce, including retail. Eliminating seasonal factors March dropped 0,1% compared to a year ago and 1,9% in twelve months. This is because most components of Imacec were down only partially compensated by the increase in services, according to the central bank chairperson Rosanna Costa. Besides the non mining sector was down 1% in the last twelve months, but taking into account non seasonal terms it actually was up 0,2% compared to the previous month.
Overall the production of goods was down 3,5%, mainly because the 8,5% collapse of the mining industry. Manufacturing was down 2,5% but the rest of goods was up 1,2%. With non seasonal terms, goods production fell 0,7% over the previous month, and as explained before because of the poor performance of mining and industry activities, with falls of 1,8% and 0,7% respectively over the previous month, while commercial activity contracted 5,4%. This was mainly due to retail performance, with lower sales in supermarkets, large stores and house specialized in clothing and footwear.
Wholesale activity also slipped, because of the sale of commodities, food and housing white line. Meantime car sales was clearly positive. Non seasonal figures showed a contraction of ,18% compared to the previous month. Finally the item services increased 0.9% with those referred to personal services representing the largest contribution. Overall performance adapted to non seasonal terms showed a 0.9% increase over the previous month.
Commenting on the latest figures, Finance minister Mario Marcel said that had it no been for the poor performance of the mining sector, the March Imacec would have been positive. It is some time since the mining industry has been reporting negative results. In effect the giant Chilean government copper corporation, Codelco, has a surplus of US$ 2,746bn in 2022, which is 62,9% lower compared to 2021 results with US$ 7,394bn. This has also meant a strong fall in revenue for the Treasury, Chilean government corporations contributed to the Treasury with US$ 3,278bn, a nominal drop of 43,9%, and most of the missing funds were originated in Codelco which a 52% annual fall during 2022. Codelco last year only contributed with US$ 2,3bn to Treasury in 2022. And even when the mining industry employment increased 8,5% in the quarter, December 2/Fabruary23, according to the Mining Industry records, which is equivalent to 268,000 workers, 21,000 more jobs in a year, it is anyhow the lowest employment record in the last eight reports.