PREVIEW-Chile industry output, jobless rate seen rising

WHAT: Chile industrial output for July;

Unemployment data for May-July period

WHEN: Monday, Aug. 30 at 9 a.m. (1300 GMT);

Tuesday, Aug. 31 at 9 a.m.

REUTERS FORECAST: Chile’s industrial output is seen growing
a seasonally adjusted 2.45 percent in July, according to a
Reuters poll of six analysts. Estimates ranged from no change
to 5.2 percent growth.

A wider pool of 10 analysts saw industrial output for July
growing by 3.0 percent compared to a year earlier. Growth
estimates ranged from 1.3 to 5.5 percent.

The unemployment rate is seen at 8.55 percent for the
May-July period, up slightly from 8.5 percent in April-June,
according to a poll of eight analysts. Estimates ranged from
8.3 to 8.8 percent.

FACTORS TO WATCH: Analysts attributed the anticipated
increase in industrial output to continuing recovery from both
the global economic crisis and a devastating Feb. 27 earthquake
which killed more than 500 people and ravaged industries in
south-central Chile.

“We’ve already seen a fairly sustained recovery in various
sectors, like wood pulp and steel production, which were some
of the hardest hit by the earthquake,” said Alejandro Puente,
chief economist for BBVA research.

Recovery in the construction and manufacturing sectors is
also a key factor lifting industrial output figures, as
post-quake reconstruction gets into full swing.

Unemployment, which usually rises during the southern
hemisphere’s winter, is also benefiting from post-quake
reconstruction, leading analysts to project only a slight
increase over the April-June period.

Analysts saw unemployment hovering around 8.5 percent
during the rest of the winter, but said it will return to
levels below 8 percent by December.

MARKET IMPACT: Analysts see positive data reinforcing
optimistic outlooks for Chile’s strong economic recovery,
boosting gains in both domestic stocks and the exchange rate.

“The positive effect that this data is going to have on
local markets will make Chile more attractive to foreign
investors, which will continue strengthening the peso,” said
Alfredo Coutino, Latin America director for Moody’s
Economy.com.

A sharp rise in the Chilean peso has triggered warnings by
the government and central bank of possible intervention. Some
central bank board members said in their last monetary policy
meeting a stronger peso could mitigate inflation in coming
months.
(Reporting by Molly Rosbach and Maria Jose Latorre; Editing by
Alonso Soto and James Dalgleish)

PREVIEW-Chile industry output, jobless rate seen rising