Chile: Business confidence declines again in July
August 4, 2017
The business confidence index (IMCE, Indicador Mensual de Confianza Empresarial) published by ICARE and the Universidad Adolfo Ibáñez fell from 43.2 points in June to 42.4 points in July, the lowest reading since December last year. For the time being, the indicator appears to have lost the momentum which built up at the beginning of the year, and seems at odds with the gradual recovery in the macroeconomy and improved consumer sentiment. As a result, the indicator remains stuck below the 50-point threshold that separates pessimism from optimism, where it has been since April 2014.
July’s decrease came on the back of worsening sentiment in the commercial and mining sectors, which more than offset greater optimism in the construction and industry sectors. The commercial sector reported a less positive outlook due to worsening general business conditions and lower employment expectations, while the mining sector grew markedly less optimistic, perhaps as a result of labor disputes at key mines. Despite a slight rise, the construction sector remains mired deep in pessimistic territory, with stricter mortgage requirements putting off potential homebuyers, while the industry sector rose thanks to greater optimism regarding demand.
Author: Oliver Reynolds, Economist