Machinery imports fall 60% due to lower investment
As of September, purchases of these goods for mining and construction totaling $ 541 million. In order to reverse trend, from the private sector call to speed up processing project.
Since mid-2013, the steady decline in private investment has become central to the slowdown of the Chilean economy. While authorities expect a surge in activity towards the end of the year, so far, the numbers do not seem to truce.
According to the Central Bank, imports of capital goods mainly for investment -accumulate, as of the second week of September, a 25% annual drop, adding US $ 8,705 million.
Under this item, the biggest drop recorded the purchases of machinery (mining and construction), with a decrease of 60% in 12 months, totaling $ 541 million. It is the largest annual decline in purchases of these capital goods, since comparable data (2003), even higher than the low of 33% recorded in 2009, during the recession.
Although the volume of imports of machinery for mining and construction ($ 541 million) represents by itself a smaller percentage to 10% of total inflows of capital goods, most of the components of this variable also showed low: the item other machinery (other sectors) exhibits a contraction of -13%, to $ 1,938 million; trucks and trucks -32%, to $ 1,237 million; other vehicles -50% to $ 672 million.
Projects
For private, the trend in imports of capital goods is symptomatic of the slowdown in private investment. From Sofofa say the figures indicate a deeper decline than anticipated process and that there is no evidence expected to make a turning point in this trend in the coming months. The union projects a 5% drop in investment this year, higher than the 4.1% drop expected by the Central Bank in its last Report.
The National Mining Society (Sonami)’s Research Manager, Alvaro Merino matchs with industry. He argues that the decline in imports “is explained by the lower investment than has been observed in the country, mainly in construction and mining”.-
He explains that both sectors are closely related, since between 2004 and 2012, the mining sector invested about USD 81,000 million -measured in current currency, of which about US $ 43,000 million was for infrastructure and construction.
The research manager from the Chilean Chamber of Construction (CCHC), Javier Hurtado, adds that “there is clearly a significant number of projects that have been putting in time and that impacts on two things: a delay in import of machinery and in its construction”.
Hurtado said that, at present time, no significant change was observed in this trend and as well as the mining sector called that important actions are taken to revive investment in the country, mainly by accelerating the environmental permitting process.
Felipe Bravo an Economist from Banco Santander, says the drop in imports of machinery “is part of a dynamic that responds to the end of the copper cycle” and also to the slowdown. The latter is reflected in a lower demand for construction and therefore less use of machinery.
Bravo also said that the rise of the dollar in the year has risen $ 73– affects less demand for imported goods, since substitution is low and “we are obliged to bring them out”.
Source: La Tercera
